Real Time Speaker Series: Kicking Investors Out of Court: The Looming Threat of Forced Arbitration

In recent years, forced arbitration clauses have swept the nation, closing the courthouse doors to countless injured and defrauded individuals. 

 

Arbitration dispenses with jury trials, important discovery, rules of evidence, appellate rights, and other procedural safeguards. It also silences victims of corporate misconduct and deprives hardworking Americans of their right to a day in court. 

 

Fortunately, investors have thus far generally avoided the onslaught of forced arbitration clauses.

 

Recent developments, however, threaten to strip investors of their fundamental right to band together and pursue their securities fraud remedies in court. In particular, the Treasury Department and certain SEC officials have recently advocated for a seismic policy shift that would permit U.S. public companies to include forced arbitration clauses in their articles and bylaws. 

 

Given this looming threat, this installment of the Speaker Series addressed the dangers of mandatory arbitration of securities claims and steps that investors can take to preserve their basic right to access public courthouses. Informative background reading on recent developments regarding forced arbitration, authored by the panel moderators, can be found here.