Mass. Regulator Urges SEC To Ban Forced Arbitrations

Law360, New York (February 12, 2013, 5:31 PM EST) -- The U.S. Securities and Exchange Commission should consider outlawing contracts that force investors to settle disputes with advisory firms through arbitration, Massachusetts’ chief securities regulator said Tuesday.

Secretary of the Commonwealth William F. Galvin wrote a public letter to the SEC’s four commissioners urging them to consider banning predispute arbitration clauses in advisory contracts. The letter comes one day after Galvin’s office issued a report finding that nearly half of all state-registered investment advisers that use standardized contracts rely on such clauses.

Arbitration is often touted...
To view the full article, register now.
Law360 Pro Say Podcast
Check out Law360's new podcast, Pro Say, which offers a weekly recap of both the biggest stories and hidden gems from the world of law.