Law360 Published BR&B Attorneys' Article Addressing SEC Commissioner's Controversial Mandatory Arbitration Remarks

8/9/2017 - Law360 published an article by BR&B partner Samuel M. Ward and associate Michael A. Toomey that addresses remarks made by SEC Commissioner Piwowar during a July 17, 2017 Q&A, in which the Commissioner invited companies to include mandatory arbitration provisions in their corporate charters.  This signaled a potential change to the SEC’s position on such arbitration provisions.  The Law360 article explains how such arbitration provisions could inhibit investors’ ability to use the federal securities laws to prevent, correct, and redress corporation malfeasance.  The article goes on to explain that arbitration is contrary to spirit of the PSLRA – the 1995 law that regulates private federal securities claims – because this law intended to promote class actions led by institutional investors, which would be impeded by arbitration clauses.  Finally, the article addresses several possible means by which investors, state legislatures, and the Supreme Court could prevent companies from including such clauses in their charters.  The article is reprinted ­here with Law360’s permission.