{"id":4445,"date":"2007-06-11T18:13:41","date_gmt":"2007-06-11T18:13:41","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2007\/06\/california_can_not_require_hig_1"},"modified":"2021-09-20T15:41:31","modified_gmt":"2021-09-20T20:41:31","slug":"california-can-not-require-hig-1","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/california-can-not-require-hig-1\/","title":{"rendered":"California Can Not Require Higher Standards for NASD Arbitration"},"content":{"rendered":"

\t\t\t\tThe California Supreme Court and a U.S. Court of Appeals have both determined that securities arbitration standards do not violate the California Constitution. The courts have instead decided that The Federal Arbitration Act preempts (is superior to) California’s ability to govern securities arbitration.<\/p>\n

Rapidly growing arbitration is forcing consumers to, often unknowingly, forego their right to go to court. To protect its citizens from injustices in arbitration the California legislature passed legislation in 2001 ordering the California court system to create ethical standards for commercial arbitrators. Comprehensive standards were then created regarding arbitrators, including disclosure and conflict-of-interest checks.<\/p>\n

The NASD’s Arbitration Code is not consistent with these new standards and the NASD refused to make adjustments to comply with the California requirements. It instead sued members of the California court system in federal court seeking a ruling that California could not set standards regarding securities arbitration. In November 2002, the US Court dismissed the lawsuit holding the US Constitution barred the suit in federal court. <\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

The California Supreme Court and a U.S. Court of Appeals have both determined that securities arbitration standards do not violate the California Constitution. The courts have instead decided that The Federal Arbitration Act preempts (is superior to) California’s ability to govern securities arbitration. Rapidly growing arbitration is forcing consumers to, often unknowingly, forego their right […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3798,3741],"tags":[],"class_list":["post-4445","post","type-post","status-publish","format-standard","hentry","category-arbitration","category-securities-fraud"],"yoast_head":"\nCalifornia Can Not Require Higher Standards for NASD Arbitration — Investor Lawyers Blog — June 11, 2007<\/title>\n<meta name=\"description\" content=\"The California Supreme Court and a U.S. Court of Appeals have both determined that securities arbitration standards do not violate the California — June 11, 2007\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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