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/.
