SEC Considering Arbitration as Forum for Resolving Shareholder Suits

WASHINGTON — The Securities and Exchange Commission is exploring a new policy that could permit companies to resolve complaints by aggrieved shareholders through arbitration, limiting shareholders’ ability to sue in court.

The initiative is at the discussion stage and may not lead to any changes in rules or practices. But any move toward arbitration could realign the balance of power between shareholders and corporate managements at a time when that balance has tipped increasingly toward shareholders. It could also limit shareholders’ ability to recover money damages or other compensation from corporations.

For more see Wall Street Online Journal.