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PRESS RELEASE

Secure Our Savings Coalition Statement on SEC Commissioner Hester Peirce Publicly Endorsing Forced Arbitration Being Used in Companies’ Charters

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Washington, DC  The following is a statement from the Secure Our Savings (SOS) Coalition in response to Securities and Exchange Commissioner (SEC) Hester Peirce’s public endorsement of forced arbitration being included in companies’ charters. SEC officials, including Chairman Jay Clayton, have recently fueled speculation that the SEC was considering abandoning its decades-old view that forced arbitration clauses violate securities laws: 

“Commissioner Peirce’s alarming public showing of support for denying investor rights gives serious urgency to the battle over forced arbitration in corporate charters.

“Seniors, first responders, veterans, teachers and other hardworking Americans with investments are rightly outraged by the notion that the SEC could strip away their rights to hold law-breaking companies accountable if they engage in fraud. Forcing wronged investors into rigged, secretive arbitration hearings effectively destroys their ability to recover their losses and leaves them unable to hold unscrupulous companies to account.

“Today’s news is the latest evidence that this precedent-shattering move could happen at any time. The SOS Coalition will continue to advocate for the rights of investors and consumers using every tactic available to convince the other SEC Commissioners that allowing shareholder rights to be dismantled will harm everyday Americans, erode consumer confidence in our markets by virtually eliminating enforcement of our nation’s securities laws, and give a green light to the next unscrupulous company looking to break the rules.”

Announcing Coalition to “Secure Our Savings” by Keeping Forced Arbitration Out of IPOs

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Washington, DC – More than 40 national and state-based organizations, led by the Consumer Federation of America, Public Justice, and the American Association for Justice, have joined together to form the Secure Our Savings (SOS) Coalition.  In its national campaign, SOS is calling on the U.S. Securities and Exchange Commission (SEC) to stand by its mission and longstanding policy of empowering and protecting American investors, including retired servicemembers, first responders, and teachers, by safeguarding their right to join together to hold law-breaking corporations publicly accountable in a court of law.

“There is no sound or legitimate excuse to roll back decades of effective policy that has protected investors and secured the retirement savings of millions.  Any attempt to do so would be an attack on hard working Americans, including seniors, who expect the government to have their backs, and not those of crooked CEOs and corrupt corporations.  Securing the nest eggs and retirement incomes of Americans shouldn’t be a partisan issue.  Fine print arbitration clauses that ban class actions already impact nearly every aspect of most Americans’ lives.  The savings they depend on to live through retirement or send their kids to college should be off limits and off the negotiating table,” said Paul Bland, Executive Director of Public Justice.

“U.S. markets have grown to be the envy of the world precisely because of the strong protections investors enjoy here.  Private class action lawsuits play a critical investor protection role by supplementing SEC enforcement, deterring fraud, and compensating fraud victims.  If the SEC were to deprive investors of this right, it would harm, not just investors, but also the honest corporations who benefit directly from the greater liquidity, lower cost of capital, and increased investor confidence that results from our combined system of public and private enforcement,” said Barbara Roper, Director of Investor Protection, Consumer Federation of America.

In recent months, SEC officials, including Chairman Jay Clayton, have fueled speculation that the SEC was considering abandoning its decades-old view that forced arbitration clauses violate the securities laws.  Corporate interests have long sought to deprive investors of their most effective tool, class action lawsuits, to fight back against securities fraud that could decimate their savings.  For instance, while the SEC recovered penalties and fees totaling $1.8 billion against Enron, WorldCom, Tyco, Bank of America and Global Crossing, private securities class actions returned $19.4 billion to defrauded investors – more than ten times as much.

Today, 133 organizations, including the SOS Coalition, sent a letter to SEC Chairman Jay Clayton urging him to uphold the rights of all American investors by reaffirming the Commission’s decades-long position that forced arbitration is bad for investors and dangerous for securities market stability because it guts enforcement of federal securities laws.

The letter reads in part,

“Eliminating investors’ right to pursue private lawsuits would therefore not only effectively eliminate their ability to recover their losses, it would also seriously erode their confidence in the integrity of the capital markets.

“Investors rely on the SEC to promote market integrity and deter and detect fraud. But the SEC cannot fulfill this role on its own. Private shareholder lawsuits serve as an essential supplement to Commission action.”

The full letter to SEC Chairman Clayton is available here.

SOS is fully prepared to use every available tactic to protect consumers’ rights including legislative advocacy, direct advocacy with the SEC, shareholder engagement, digital and promotional campaigns, and daily rapid response.

To stay up to date on SOS activities, visit https://secureoursavings.com/.