At least one of the litigation reform proposals by the Committee on Capital Markets Regulation (aka the Paulson Committee) appears to be getting some traction. A front page story (subscrip. req’d) in today’s Wall Street Journal states that the SEC is exploring whether it should allow public companies to contract with their investors to provide for alternative dispute resolutions for securities claims.
Quote of note: “[A]ny move toward arbitration could realign the balance of power between shareholders and corporate managements at a time when that balance has tipped increasingly toward shareholders. It could also limit shareholders’ ability to recover money damages or other compensation from corporations. The idea of giving companies the option of arbitrating shareholder disputes is likely to spark fierce opposition from both investor-rights groups and trial lawyers. As a result, there’s a good chance that it could fall flat.”