Armed with an argument for protecting investors' rights, SEC member Luis Aguilar went before the North America Securities Administrators Association's annual conference in Washington, D.C to argue that mandatory arbitration agreements should not be allowed, according to a recent Reuters.com article. Aguilar feels that the investor should be able to choose the forum in which they want to bring their legal claims.
These are the first really outspoken comments by Aguilar since the enactment of the 2010 Dodd-Frank Wall Street reform law, provided the SEC with new powers to raise investor protections, including the authority to scale back or completely prohibit pre-dispute arbitration agreements.
Arguments made by those who want to continue with mandatory arbitration agreements include the reduction of costs and prevention of frivolous litigation, according to the Reuters.com article.
As of yet, the SEC has not taken action on Aguilar's proposal. Aguilar is one of five voting commissioners but the article pointed out that his views on some issues have diverged from those of some of his peers on the commission.
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