Dodd-Frank empowers SEC to end mandatory arbitration

10/13/2010 | InvestmentNews (free registration)

The Securities and Exchange Commission has been given power under the Dodd-Frank financial-reform law to eliminate mandatory arbitration from agreements between brokers and investors. If the SEC exercises this power, it could dramatically increase the amount of private litigation between investors and brokers, a development that some industry watchers say would lead to more transparent operations by brokerage firms. Currently, disputes between clients and brokers go before an arbitration panel chosen by the Financial Industry Regulatory Authority.

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