Now that we’ve turned the corner into the New Year – though not quite leaving behind the lingering geo-political crises, turmoil in the markets, the health care morass and the housing/mortgage debacle, among other socio-economic woes – it might be timely to revisit some of our own basic themes here at the Securities Fraud Hotline, like banning mandatory arbitration of investor disputes AND returning to investors the right and choice to go to court (or an alternative forum independent of the brokerage industry) to have a judge and jury assess their grievances.

It’s a perverse phenomenon when you think about it, that consumers, including investors, upon whom the markets in large measure rely, are denied their constitutional right to a jury trial and choice of forum and instead are routinely relegated to fight for their rights behind the closed doors of industry-run arbitration instead of in the light of day in front of a group of their peers – which, ironically, is apparently where most businesses would prefer to adjudicate their own business disputes.

This is the latest theme from Susan Antilla’s “Business Fights for the Tilted Arbitration Field” (December 13, 2007), where she reported on Bloomberg.com about the hearings in Congress on the Arbitration Fairness Act of 2007, and mentioned Ted Eppenstein’s appearance in Congress on October 25, 2007 on behalf of public investors and in support of the Act and its ban on mandatory securities arbitration. As we’ve said before, Congress, who makes the laws, really is the last hope for investors, and in this case Congress is the best hope to change the law for the public good for consumers forced into mandatory arbitration. Ms. Antilla ends the piece with this trenchant observation on the hypocrisy of the now pervasive insistence of big business and the brokerage industry on herding their customers into a forum not of their choice :

When it’s their turn to sue, though, you rarely find corporate heavyweights racing to arbitration. The grade schooler might ponder this question after learning about those branches of government [Congress, the courts and the executive branch]: If arbitration works so well, why don’t corporations use it when they have a complaint?

Of course that’s because, despite the claims of fairness you hear from the industry side, it really isn’t a level playing field. As Ms. Antilla notes, business-against-business disputes are typically heard in court, where business likes the odds because, as she reports from Senator Feingold, co-sponsor of the Arbitration Fairness Act: “arbitration [is] an ‘unaccountable’ system where the law doesn’t necessarily apply.”

Isn’t it time to restore to the public these basic rights?