SEC Chair Clayton Promises Transparency but Doesn’t Commit to Opposing Forced Arbitration in Letter to Rep. Maloney
WASHINGTON, DC – In response to a letter sent by Congresswoman Carolyn B. Maloney and all of the Democratic members of the House Financial Services Committee, SEC Chairman Jay Clayton committed to holding a public vote by the full Commission on any decision on forced arbitration clauses in corporate governance documents, but would not commit to opposing them. Clayton also stated that this issue is not a priority for him or the SEC at this time.
After receiving the letter, Rep. Maloney said, “While I’m pleased that Chairman Clayton took my letter so seriously, and wrote a detailed response, I’m still very disappointed that he has not committed to opposing the use of forced arbitration clauses in company bylaws should this come up for a Commission vote. Allowing companies to use forced arbitration clauses would devastate investor confidence in our markets, and would prevent shareholders from holding the next Enron or WorldCom accountable in court.”
Rep. Maloney serves as Ranking Member of the Subcommittee on Capital Markets, Securities, and Investment of the House Financial Services Committee.
You can read Chairman Clayton’s letter here.