Senator Elizabeth Warren, Ranking Member of the U.S. Senate Committee on Banking, Housing and Urban Affairs, and Senator Jack Reed sent a letter to Securities and Exchange Commission Chair Paul S. Atkins urging the SEC not to revise its long-standing approach to forced arbitration in a way that would allow public companies to require investors to arbitrate disputes instead of pursuing claims in court. The intervention follows an SEC Sunshine Act notice indicating the Commission plans to amend its policy. The Senators argued that reversing the SEC’s decades-old position would be inconsistent with Section 14 of the Securities Act and Section 29(a) of the Securities Exchange Act. They warned that a rollback would encourage wider adoption of forced arbitration clauses, weakening private securities litigation as an enforcement mechanism, limiting investor relief, and allowing misconduct to go unpunished; they asked Chair Atkins to reaffirm the SEC’s view that forced arbitration clauses are contrary to the public interest and to provide a briefing to Committee staff on any planned policy changes.
U.S. Senate Committee on Banking, Housing and Urban Affairs 2025-09-17
U.S. Senate Committee on Banking, Housing and Urban Affairs Democrats press SEC Chair Atkins to maintain protections against forced arbitration
Senators Elizabeth Warren and Jack Reed urged SEC Chair Paul S. Atkins not to amend the SEC's policy on forced arbitration, which would allow public companies to mandate arbitration for investor disputes. They argued this change would contradict Sections 14 and 29(a) of the Securities Acts, weaken securities litigation, limit investor relief, and enable misconduct. The Senators requested a reaffirmation of the SEC's stance against forced arbitration and a briefing on any policy changes.