WASHINGTON, D.C.—Benjamin Schiffrin, Director of Securities Policy for Better Markets, issued the following statement in connection with the Securities and Exchange Commission (SEC) issuing a policy statement stating that the federal securities laws do not preclude public companies from having mandatory arbitration provisions for shareholders:

“SEC Chair Paul Atkins is at it again. He’s already demonstrated that his agenda mirrors that of the financial industry. Today, he’s given corporate America one of its top priorities. Corporations have long sought to force investors, consumers, and employees to arbitrate claims, which would prevent them from going to court to have unbiased judges with fair rules hear their claims of corporate misconduct. Although up to now the SEC has taken the position that investors’ right to sue in court is a crucial shareholder protection, today the SEC issued a statement declaring that it is permissible for public companies to force shareholders to arbitrate claims.

“While corporations always claim arbitration is good for investors, that’s false and proved by the fact that corporations have to force investors into arbitration. If arbitration was so great, investors would choose arbitration. They don’t because it’s more like a star chamber, an unfair if not biased forum with often biased arbitrators, little transparency, and too few procedural protections for investors. That’s why corporations want to force arbitration on investors: arbitration almost always favors them and rarely results in a win for investors or consumers. The reasons mandatory arbitration is unfair to investors and consumers are numerous. Even Trump’s first SEC Chair, Jay Clayton, refused to give the industry what it wanted on this issue.

“Unfortunately, Chair Atkins has no such compunction about catering to the financial industry. In doing so, he is betraying the SEC’s mission. Try as he might to convince people that the SEC’s role is to spark human creativity, it is not. Nor is it to promote innovation. The SEC’s mission is to protect investors, a mission at which it is now failing spectacularly.”

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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.