Legal and Ethical Perspectives on the Use of Arbitration in the Securities Industry
No Thumbnail Available
Kelly, Eileen P.
Donahue, Eugene L.
Clark, Lawrence S.
INTRODUCTION|The securities industry currently requires customers to sign brokerage contracts with predispute arbitration agreements ("PDAAs") as a standard industry practice. PDAAs are contract clauses that require arbitration as the forum for conflict resolution if customers subsequently have a dispute with their broker. Thus, investors are precluded from suing their brokers in court. In a 1989 decision, Rodriguez de Quija v. Shearson/American Express, the United States Supreme Court upheld the use and enforceability of PDAAs.|As investor complaints mount regarding the fairness of PDAAs and the arbitration process itself, intense scrutiny by the media, the judiciary, regulatory agencies, and consumer groups has focused on securities industry practices in resolving investor-broker disputes. Investors contend that the current PDAA/arbitration process favors the industry and forces customers into an industry sponsored forum...
25 Creighton L. Rev. 1311 (1991-1992)
Creighton University School of Law