For over three decades, applicable regulations have provided investors with an absolute right to have their disputes arbitrated.6 Investment firms have gained the same right in return by entering into predispute arbitration agreements with their new customers. Such contracts ensure that both sides are treated fairly and effectuate the public policy in favor of predispute arbitration agreements that has been recognized by both Congress and the United States Supreme Court.7 Opponents of predispute arbitration agreements, however, seek neither fairness nor equality; rather, they seek an unfair strategic advantage. They want investors to retain their right to arbitrate as they see fit, but to deprive investment firms of the same right.
Attorney’s Roundtable – Litigation Update, Life Insurance Settlement Association 13th Annual Spring Conference
“Market Structure” SIFMA Compliance and Legal Division Annual Seminar Panel
“Scheme Liability under Federal Securities Law,” Andrews Publications Webcast.
In Central Bank of Denver N.A. v. First Interstate Bank of Denver N.A., the Supreme Court held that Section 10(b) of the Securities Exchange Act and Rule 10b-5 provide a private right of action for securities fraud against primary violators, but not against those who aid and abet primary violators. The lower courts were left to sort out actionable primary conduct from merely aiding and abetting.
Practicing Law Institute: "Securities Arbitration 2006: Taking Responsibility," New York City, New York.