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Senate Passes Financial Reform Bill

David P. Meyer, Esq.

Last Thursday night, the U.S. Senate passed The Restore American Financial Stability Act, which seeks to implement financial reforms, curb abusive lending practices, and limit risk-taking by large institutions.

Under the current version of the Act, the SEC will be called upon to decide the fate of mandatory securities arbitration. As it now stands, investors must pursue claims against brokerage firms through FINRA-sponsored mandatory arbitration, rather than pursuing a claim in court. . The Act directs the SEC to evaluate mandatory pre-dispute arbitration clauses and promulgate rulemaking.

The battle now shifts to the House-Senate conference, where the Senate's version of the Act will be reconciled with the House bill passed last December.

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