Published: August 2013

Protecting ordinary investors from Big Business

Praise for Rep. Ellison Bill to end mandatory arbitration in investor disputes with brokers and advisors.

Rep. Keith Ellison, D-Minn., a member of the House Financial Services Committee, introduced legislation that would end mandatory arbitration in broker and investment adviser agreements with clients, but the bill faces an uphill battle.

“Investors want to get back in the market, but they're rightly wary that the game is rigged against them,” Mr. Ellison said in a statement to InvestmentNews. “Investors shouldn't have to sign away their rights in order to work with a financial adviser or broker dealer to build a secure retirement. By removing some of the unfair advantages, consumers will be more eager to invest, which will create jobs and strengthen the economy.”

The bill recognizes that investor confidence is essential to the health of the securities markets, and that broker-dealers and investment advisors hold powerful advantages over investors. The proposed legislation would make three things unlawful:

1.    It would prohibit broker-dealers and investment advisors from requiring that customers arbitrate their disputes.
2.    The bill would make it unlawful to limit an investor's choice of forum for dispute resolution.
3.    It would prohibit broker-dealers and investment advisors from restricting customer rights to pursue class actions.

Consumer Action, and coalition members, support Rep. Ellison for introducing this important legislation to prohibit forced arbitration for millions of ordinary investors.

Lead Organization

Americans for Financial Reform (AFR)

Other Organizations

American Association for Justice | Americans for Financial Reform | Center for Justice & Democracy | Consumer Federation of America | Consumers for Auto Reliability and Safety | D.C Consumer Rights Coalition | Homeowners Against Deficient Dwellings | National Association of Consumer Advocates | National Association of Shareholder and Consumer Attorneys | National Employment Lawyers Association | North American Securities Administrators Association | Public Citizen | U.S. PIRG (federation of state Public Interest Research Groups)

More Information

For more information, visit AFR's website.

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Protecting ordinary investors from Big Business   (investor-choice-act.pdf)