SEC Petition for Rulemaking Banning the Use of Forced Arbitration Clauses in Broker/Dealer and Investment Advisory Agreements
In June 2023, the SEC released a report to Congress analyzing the use of mandatory arbitration among SEC-Registered Investment Advisors. The report estimated that approximately 61% of SEC-registered advisers serving retail investors incorporated mandatory arbitration clauses into their investment advisory agreements. Arbitration clauses restrict investors’ ability to access the legal system to resolve disputes with…