Originally from Dispute Resolution Journal

This article considers the advantages of arbitration and its use as a dispute resolution mechanism by securities brokers and their customers. An analysis is made of recent cases bearing on the question of which claims between such parties are properly arbitrable and of the Securities and Exchange Commission's 1979 release on arbitration clauses. This analysis demonstrates that courts consistently have held prior arbitration agreements unenforceable with respect to express and implied causes of action arising under the Securities Act and the Securities Exchange Act.

The authors conclude that since the Supreme Court has chosen not to grant certiorari in any of the cases in which review has been sought, and there appears to be no significant conflict in the decisions of the federal courts dealing with this issue, K is not likely that the law in this area will change in the near future. They find that for those claims not so reserved for judicial determination, arbitration can be an efficient and economical method of resolving investor-broker disputes.