Securities Mediation: Dispute Resolution for the Individual Investor

54 Pages Posted: 2 Nov 2007


This article examines the fairness of mediation of customers' disputes with their securities brokers and their brokerage firms. After a brief description of the history of alternative dispute resolution of customer disputes in the securities industry, including the rise of mediation in the 1990s, I examine the impact on individual investors of the various layers of regulation of the mediation process, including the federal securities laws and state mediation laws. I also reject a recent federal court's holding that the Federal Arbitration Act applies to mediation as an unwarranted expansion of the FAA. I then analyze the various dimensions of fairness of this dispute resolution method, including substantive and procedural justice, party choice, and achievement of non-legal objectives, and conclude that securities mediation is a fair method of dispute resolution for the individual investor, and is a viable alternative to arbitration. In sum, this article will contribute to the growing body of literature that considers the impact on investors of the securities industry's promotion of a diversity of methods to resolve customer disputes.

Keywords: securities, mediation, alternative dispute resolution, investor rights

JEL Classification: K10, K22

Suggested Citation

Gross, Jill, Securities Mediation: Dispute Resolution for the Individual Investor. Ohio State Journal on Dispute Resolution, Vol. 21, No. 2, 2006, Available at SSRN:

Jill Gross (Contact Author)

Pace Law School ( email )

78 North Broadway
White Plains, NY 10603
United States

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