Arbitration and Reform in Private Securities Litigation: Dealing with the Meritorious as Well as the Frivolous

Abstract

The PSLRA protects securities fraud feasors by insulating them from traditional fraud liability without basis in policy or economics. Indeed, radical deregulation like this is economically risky, and a threat to the long term stability of American financial markets. Other alternatives, such as arbitration, could operate to preserve deterrence while diminishing the costs of securities litigation.

JEL Classification: D63, E44, G18