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David Massey
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State regulators have urged the
Securities and Exchange Commission
to give aggrieved clients of brokerage firms the choice between
arbitration and litigation.
David Massey
, president of the
North American Securities Administrators
Association
and deputy administrator with the securities division of the
North Carolina Department of the Secretary of
State
, told
CR
that giving investors the choice of where to press their claim
would enable customers to have their day in court on issues that
may be too complex for arbitration.
The Dodd-Frank Act empowered the
Securities and Exchange Commission
to limit or prohibit mandatory pre-dispute arbitration clauses in
broker/dealer accounts. B/Ds fear that doing so would, among other
things, cause costs to rocket, encourage frivolous claims and
lengthen the dispute process for both firms and investors (
Compliancereporter.com, 10/1
).
Massey argued that only investors were hurt by not having the
option to pursue litigation against brokerages, particularly in
complex cases. Whats the downside of the investor having the
election, depending on the complexity of the issue, between
arbitration and litigation? he added.
--Jake Simpson
