Overview
- The SEC scheduled a public meeting Wednesday to consider issuing a statement that may permit companies to require shareholder claims be handled in private arbitration.
- The review revisits an issue considered during the Trump administration and first spotlighted in 2012 when the SEC opposed a Carlyle Group IPO plan with arbitration terms.
- Sens. Elizabeth Warren and Jack Reed urged Chair Paul Atkins to reject the move, warning it would put investors and markets at risk.
- Investor advocates and legal scholars say moving cases out of court would reduce public accountability and stall the development of securities case law.
- Corporate and Republican groups argue arbitration would curb frivolous shareholder class actions, and the agenda also includes a proposed extension of a private-fund disclosure compliance deadline.