The corporate litigation world experienced a shock when the U.S. Securities and Exchange Commission announced that companies could go public, even if they require shareholders to sign mandatory arbitration agreements. The announcement has left securities litigators waiting to see who’ll be the first to take advantage of the SEC’s new leniency.
The policy shift goes against decades of SEC history blocking companies that mandate shareholder arbitration. Chairman Paul Atkins said the commission’s Sept. 17 decision, when combined with another policy concerning automatic stays, were part of his campaign to make initial public offerings “great again.” […]
But securities litigators are unsure whether the policy change will be a bomb or bust, saying they’re waiting to see who’ll be the first to embrace mandatory shareholder arbitration—and how they’ll fare against the inevitable legal and shareholder heat ahead.
