House Committee Approves Bill To Prohibit BDs and Advisors From Mandating Arbitration

Posted on November 23rd, 2021 at 1:10 PM
House Committee Approves Bill To Prohibit BDs and Advisors From Mandating Arbitration

From the Desk of Jim Eccleston at Eccleston Law:

The House of Representatives’ Financial Services Committee has passed a bill intended to prohibit mandatory arbitration commonly employed by broker-dealers and advisory firms. 

The Investor Choice Act, H.R. 2620, restricts broker-dealers and investment advisors from mandating pre-dispute binding arbitration clauses in their client agreements. According to Maxine Waters, Chairwoman of the Financial Services Committee, the Investor Choice Act addresses “long-standing and deeply unfair practices of forcing customers to resolve their claims through arbitration instead of as part of a class action.” 

The committee also passed the Empowering States to Protect Seniors from Bad Actors Act, H.R. 5914, which would transfer responsibility for managing the Senior Investor Protection Grant Program from the Consumer Financial Protection Bureau (CFPB) to the Securities and Exchange Commission (SEC). The bill organizes an interdivisional task force within the SEC to examine grant applications and administer the program. 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, arbitration, house of representatives

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