Foster, Merkley Lead Effort to Help Ensure Consumers Wronged by Broker-Dealers and Investment Advisors Can Get Justice
Washington, D.C. – Today, Congressman Bill Foster (D-IL) teamed up with Senator Jeff Merkley (D-OR) to lead 12 lawmakers in the introduction of the Investor Choice Act—legislation to prohibit pre-dispute mandatory (or “forced”) arbitration agreements and ban prohibitions on class action lawsuits in customer contracts that investors often must enter into in order to receive services from broker-dealers or investment advisors.
“Individuals shouldn’t need to surrender their legal rights because they choose to work with a financial advisor or broker dealer to plan for their retirement and invest their hard earned money,” said Congressman Foster. “This legislation levels the playing field for consumers and prevents them from being victims of a rigged system that denies them fair legal recourse if they are wronged. I’m proud to work with Senator Merkley on this important legislation for American consumers.”
“Every consumer deserves a fair shot at justice when they’ve been wronged or taken advantage of by investors,” said Senator Merkley. “But when an investment advisor or broker chooses the judge, pays the judge, and promises future business to the judge, it’s clear that the system meant to deliver that justice is rigged. Let’s make this the year that we fix that, by standing up for consumers and passing the Investor Choice Act.”
“Forced arbitration lets broker dealers and financial advisors muscle Americans out of the courtroom and into proceedings they control,” said Senator Whitehouse. “We need a fair, transparent system that lets consumers pursue justice when they’re wronged, not a rigged process designed to rob them of their rights.”
“Forced arbitration clauses invariably favor big business over everyday consumers by hampering their ability to seek justice when they are wronged,” said Senator Menendez. “No one should be forced to give up their rights when they invest their hard-earned money to plan for retirement or save for their child’s education. Our bill levels the playing field and protects investors by prohibiting forced arbitration clauses in any client agreement with a broker, dealer, or investment advisor. Let’s pass this bill without delay.”
“Americans shouldn’t be forced to sign away their fundamental legal rights in order to plan for their financial future,” said Senator Blumenthal.
The legislation is endorsed by North American Securities Administrators Association (NASAA), American Association for Justice (AAJ), Public Citizen, and Public Investors Advocate Bar Association.
Merkley and Foster are joined in the introduction by U.S. Senators Richard Durbin (D-IL), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI), Robert Menendez (D-NJ), and Richard Blumenthal (D-CT), and U.S. Representatives Carolyn Maloney (D-NY-12), Gregory Meeks (D-NY-5), Sean Casten (D-IL-06), Nydia Velázquez (D-NY-07), Chuy García (D-IL-04), Jan Schakowsky (D-IL-09), and Madeline Dean (D-PA-04).