Thursday, September 15, 2011
In a Sept. 12 speech at the North American Securities Administrators Association 2011 Annual Conference that addressed a wide range of issues, SEC Commissioner Elisse B. Walter touched on the subject of mandatory arbitration and stated that the SEC would be taking up the issue soon (although Dodd-Frank does not mandate the SEC to do so), Specifically:
Regardless of changes in the relationship between investors and the professionals to whom they turn for advice, disagreements will arise that need to be resolved quickly and fairly. Following the dictates of Dodd-Frank, the SEC intends to thoroughly review the mandatory arbitration provisions that are written into most brokerage contracts. (emphasis added)
I believe that in recent years FINRA has provided a relatively cost-effective way to fairly resolve disputes. Nonetheless, I also completely understand the frustration of investors who are denied their opportunity for a day in court and find themselves forced to make their case in front of an arbitration forum.