Securities Law and Arbitration: The Enforceability of Predispute Arbitration Clauses in Broker-Customer Agreements

28 Pages Posted: 27 Oct 2009 Last revised: 12 Nov 2009

See all articles by Margo E. K. Reder

Margo E. K. Reder

Boston College - Carroll School of Management

Date Written: October 27, 1990

Abstract

This article explores the alternative dispute resolution technique of arbitration as it is deployed in broker-customer securities disputes. Historically such disputes were resolved in judicial forums, but increasingly courts are compelled to turn over these cases to arbitration associations. In the typical scenario involving broker-customer securities arbitration the customer has lost money on some investment and later files suit in an Article III court attempting to recoup losses. The broker seeks a stay of this litigation as well as an order compelling arbitration per the predispute arbitration agreement the customer had initially executed upon opening the brokerage account. The author offers a detailed analysis of decisions in this area, as well as a number of solutions for both customers as well as brokers.

Suggested Citation

Reder, Margo E. K., Securities Law and Arbitration: The Enforceability of Predispute Arbitration Clauses in Broker-Customer Agreements (October 27, 1990). Columbia Business Law Review, No. 1, pp. 91-117, 1990. Available at SSRN: https://ssrn.com/abstract=1495346

Margo E. K. Reder (Contact Author)

Boston College - Carroll School of Management ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
617.552.0410 (Phone)

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