When you open an account with a stockbroker, you agree that any disputes will be settled by arbitration, you cannot bring the dispute to the courts. Yet, the Seventh Amendment to our nation’s Bill of Rights states: “In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.” Arbitrators do not have to rely on case law or legal precedent as courts do. They can simply follow their gut instincts and they seldom provide detailed written decisions as a plaintiff would have in court.
Pam Martens really does a number on the mandatory arbitration clause in your agreement with your broker. This clause allows the financial industry to run its own private justice system where both its customers and its employees are barred from taking their lawsuits into a court of law so that the public and the press can monitor the proceedings and have future access to the detailed court records to analyze patterns of crimes or recidivism.
Bills to overturn Wall Street’s no-court system have failed to make it out of committee for decades.
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