WASHINGTON, D.C. (May 21, 2009) –The North American Securities Administrators Association (NASAA) today announced its full support of the Arbitration Fairness Act of 2009 (S. 931, H.R. 1020), which seeks to protect the right of Americans to have their day in court by making pre-dispute agreements requiring arbitration for any employment, consumer, franchise or civil rights disputes unenforceable.
The legislation was introduced by Sen. Russ Feingold (D-WI) and seven cosponsors in the Senate and Rep. Hank Johnson (D-GA) in the House, where H.R. 1020 has the support of 57 cosponsors.
“We appreciate that the Senate bill now includes a provision to specifically include services relating to securities, which would not require investors to accept mandatory pre-dispute arbitration clauses, and we encourage similar language in its House counterpart to ensure that investors will have a choice between arbitration and the traditional civil court system,” said NASAA President and Colorado Securities Commissioner Fred Joseph.
Almost every broker-dealer presently includes in their customer agreements a provision that requires public investors to submit all disputes that they may have with the firm and/or its representatives to mandatory arbitration. NASAA has long supported reforms to this system.
Joseph said NASAA will continue to work with Congress to restore choice, fairness and balance to the existing securities arbitration system.
“NASAA believes this ‘take-it-or-leave-it’ clause in brokerage contracts is inherently unfair to investors and that the Arbitration Fairness Act of 2009 is a positive step in the right direction,” Joseph said. “As long as securities arbitration remains mandatory, investors will continue to face a system that is not fair and transparent to all. That is why NASAA included passage of the Arbitration Fairness Act as a key component of its Pro-Investor Legislative Agenda for the 111th Congress.”
NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the provinces and territories of Canada, and Mexico.
For more information:
Bob Webster, Director of Communications