Now in Legal Rebels:
Posted Apr 16, 2007 07:56 pm CDT
The Securities and Exchange Commission is studying a sure-to-be controversial plan to encourage – or even require – parties in securities litigation to arbitrate rather than litigate their cases, potentially limiting damages.
The potential change in policy is still at the discussion stage, and may never be enacted, reports the Wall Street Journal (subscription required). But, if it is, expect explosive opposition from trial lawyers and shareholder rights groups.
Under the SEC approach, corporations could amend their bylaws (perhaps requiring advance shareholder approval), to provide for arbitration, the newspaper says. Citing “people familiar with the matter,” it says the idea came from “private commissions looking into the competitiveness of U.S. financial markets.”