Ted Krebsbach comments on his role in landmark Supreme Court Shearson/American Express v. McMahon ruling as Securities Arbitration Commentator looks back 30 years later.
THE LEGACY. For the past several weeks we've been looking back at Shearson/American Express v. McMahon, 482 U.S. 220 (1987), the ground-breaking Supreme Court case dealing with securities arbitration. Last in our series marking the case's 30th anniversary on June 8th is a look at its legacy. To do that, we sought comments from some key figures from that era. At issue in McMahon was whether claims arising out of both the Securities Exchange Act of 1934 (which in section 29(a) prohibits "any condition, stipulation, or provision binding any person to waive compliance with any provision of the Act") and the Racketeer Influenced and Corrupt Organizations Act, were arbitrable under the FAA. As we learned on June 8, 1987, a somewhat divided Court, replete with partial concurrences and dissents, held 5-4 that claims arising out of the Securities Exchange Act of 1934 were arbitrable under the FAA. SCOTUS also ruled 9-0 that Racketeer Influenced and Corrupt Organizations Act claims were arbitrable.