Arbitration of Investors' Claims Against Issuers: An Idea Whose Time Has Come?

Barbara Black

University of Cincinnati - College of Law

August 1, 2011

Law and Contemporary Problems, Forthcoming
University of Cincinnati College of Law Public Law & Legal Theory Research Paper Series No. 11-13

Ever since the U.S. Supreme Court held that arbitration provisions contained in brokerage customers’ agreements were enforceable with respect to federal securities claims, proposals have been floated to include in an issuer’s governance documents a provision that would require arbitration of investors’ claims against the issuer. To date, however, publicly traded domestic issuers and their counsel have not seriously pursued these proposals, probably because of several legal obstacles to implementation. In addition to these legal obstacles, publicly traded issuers may not have perceived significant advantages to arbitration. Recent legal developments, however, make inclusion of an arbitration provision in a publicly traded issuer’s governance documents a proposal worthy of serious consideration. In particular, because of the Supreme Court’s recent opinion in AT&T Mobility LLC v. Concepcion, issuers may be able to achieve an advantage through adoption of an arbitration provision in their governance documents that they were not able to achieve through PSLRA and the Securities Litigation Uniform Standards Act. They could finally achieve the demise of securities class claims.

Number of Pages in PDF File: 34

Keywords: arbitration, securities class actions, investors, remedies

JEL Classification: K22

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Date posted: August 1, 2011 ; Last revised: November 16, 2011

Suggested Citation

Black, Barbara, Arbitration of Investors' Claims Against Issuers: An Idea Whose Time Has Come? (August 1, 2011). Law and Contemporary Problems, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1899538

Contact Information

Barbara Black (Contact Author)
University of Cincinnati - College of Law ( email )
P.O. Box 210040
Cincinnati, OH 45221-0040
United States

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