U.S. Senator Robert Casey of Pennsylvania has joined the efforts of two other U.S. Senators, and others, to persuade the SEC to lift the requirement mandating arbitration when there is a security dispute. Senator Casey expressed his opinion earlier this week at the yearly public policy conference hosted by the North American Securities Administrators Association Inc. (NASAA) of Washington. Mr. Casey said he would use his position as a Banking Committee member to push the SEC on this matter.
Senator Russ Feingold of Wisconsin and Senator Patrick Leahy of Vermont had written a letter to the SEC just last week requesting that mandatory arbitration in securities disputes be banned.
Currently, most investors are required to sign agreements mandating that they take their disputes to an NASD-operated arbitration system. NASAA has asked the U.S. Congress to consider letting investors bring their disputes to the courts.
At a separate panel on investor protection, Ira Hammerman, senior vice president and general counsel of the Securities Industry and Financial Markets Association, spoke in favor of the arbitration system. He sees it as a more efficient way for customers to have their claims addressed. He did say that because arbitration was becoming more like litigation, however, there could come a time when it might not make sense to pursue arbitration.
Bryan Lantagne, the director of the Massachusetts Securities Division, spoke against the arbitration system. He cited a lack of forum choice for investors and the fact that industry arbitrators, as arbitration panel members, got to issue decisions regarding claims made by investors. He also pointed out that investors did not usually receive written decisions, nor did they have the right to appeal decisions. He also spoke out against a recent proposal by the Committee on Capital Markets Regulation that would allow company shareholders to be come part of the arbitration system.
Shepherd Smith and Edwards has helped thousands of investors recover funds by representing them in arbitration and/or mediation proceedings. Our firm is made up of a team of experienced lawyers, consultants, and others that are committed to helping our investor clients who have been victimized by the wrongful action of members of the securities industry. Contact Shepherd Smith and Edwards today to schedule your free consultation.
Related Web Resources:
Senators urge end to mandatory arbitrations, Investment News, May 8, 2007
North American Securities Administrators Association
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