Mandatory Arbitration Provisions

Reports that the Securities and Exchange Commission was considering allowing companies that were undertaking IPOs to include mandatory arbitration provisions in their charters raised many concerns. While the inclusion of such provisions does not appear to be a priority for the Commission, the consideration has resulted in a series of letters between members of Congress and the Commission that are worth reading. The communications may not be as interesting as the Issa-Schapiro letters, but certainly present a good history lesson regarding the matter. In a March 12, 2018 letter to Chair Clayton, Congresswoman Carolyn Maloney and others outline the historic views of the Commission that forced arbitration of securities law claims is contrary to public policy and contrary to the Supreme Court's view that such a provision would violate the anti-waiver provisions of Section 29(a) of the Securities Exchange Act. In a letter dated April 24, 2018, Chair Clayton responded to