FOR IMMEDIATE RELEASE: September 17, 2025
CONTACT: Jarice Thompson, jarice@ourfinancialsecurity.org
Republican SEC Commissioners Make a Backdoor Attack on Investor Rights
Statement of Patrick Woodall, managing director for policy at Americans for Financial Reform:
Today, the Republican SEC Commissioners moved a cowardly measure that undermines the rights of investors by allowing SEC staff to approve company requests to force all shareholder cases into individual forced arbitration. This move is a backdoor reversal of a longstanding SEC policy of rejecting forced shareholder arbitration that would allow unelected and unappointed bureaucrats to make the decision to eliminate people’s rights when their investments have been erased because of corporate misconduct, malfeasance, or fraud.
Companies want to prevent investors from banding together to file class action lawsuits to protect their rights under federal and state laws. Forcing each and every person to be required to go through a byzantine secret arbitration system where the deck is stacked against investors allows companies to keep systematic wrongdoing under wraps and lets corporate scofflaws get away with misdeeds that cost investors — and the economy — dearly. Today’s decision lets Commission staff wipe out people’s constitutional right to charge corporate wrongdoers in a trial by jury. The Republican Commissioners should be ashamed of attacking constitutional rights under the cover of darkness.
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