Last Friday, Rep. Keith Ellison (D-Minn) introduced the “Investor Choice Act” into the House of Representatives, a bill that proposes to ban broker-dealers, investment advisers, funding portals and municipal securities dealers from including mandatory arbitration clauses in their customer and client agreements. While Dodd-Frank explicitly authorized the Securities and Exchange Commission to ban such arbitration clauses to protect investors, fhe SEC has not yet acted on its authority and Commissioner Walter recently stated publicly that the SEC was unlikely to do so in 2013. While I suspect this bill has little to no chance of getting passed, it may prompt the SEC to act in 2014.

Related Posts

Two Federal Circuits Find Health Insurance Claims Outside Scope of Arbitration Clauses
May 21, 2014

Because courts apply a presumption of arbitrability when they analyze whether particular claims fall within the scope of an arbitration...

Using Arbitration Clauses in Class Action Settlements
April 9, 2014

Corporations frequently rely on arbitration clauses in contracts to expediently resolve disputes, cut down litigation costs,...

California Court Rules on Mandatory Arbitration Clauses in Trusts
April 9, 2014

There are not many jurisdictions that have weighed in on the issue of whether arbitration clauses should be mandatory in trusts....