Critics of the mandatory arbitration demands broker-dealers and investment advisers often require of their customers have stepped up their fight to get the Securities and Exchange Commission to either limit or end the practice.
In a letter to SEC Chairman Mary Jo White, the North American Securities Administrators Association, a coalition of state securities regulators, wrote that the “take it or leave it” approach of mandatory pre-dispute arbitration clauses is harmful to investors. She was reminded that the Dodd-Frank Act provides the Commission with authority to limit or prohibit these clauses, a power it has yet to exercise.
