Tr?id=566623520170033&ev=PageView&noscript=1

ÍøÆØ³Ô¹Ï

PIABA Urges SEC to Limit RIAs' Mandatory Arbitration and Mandate Disclosure of Client Claims

Posted on July 28th, 2023 at 11:02 AM
PIABA Urges SEC to Limit RIAs' Mandatory Arbitration and Mandate Disclosure of Client Claims

From the Desk of Jim Eccleston at ÍøÆØ³Ô¹Ï.

The Public Investors Advocate Bar Association (PIABA), a trade group representing plaintiffs' lawyers, has urged the Securities and Exchange Commission (SEC) to take action against the "broken" arbitration system used by investors bringing claims against registered investment advisers (RIAs). PIABA also demands increased transparency from RIAs concerning customer complaints.

PIABA's case to the SEC included a presentation consisting of testimonials from two customers of RIAs who had difficulty recouping losses due to the high costs or lack of accountability in arbitration. In one case, the plaintiff received an upfront estimate of $200,000 for pursuing a claim against her investment adviser through arbitration, which is more than she allegedly lost, according to AdvisorHub

Likewise, the SEC recently released a report expressing concerns about RIAs' use of mandatory arbitration clauses and highlighting issues such as investors being compelled to attend hearings far from their homes, receiving lower damages, and being subjected to bans on class action claims.

PIABA further emphasizes that investors face difficulties in properly vetting RIAs due to the lack of disclosure regarding the existence and resolution of claims. Unlike financial advisors who must report customer complaints and litigation to the Financial Industry Regulatory Authority (FINRA), SEC-overseen investment advisers are not always obligated to disclose this information, leading to a disparity in transparency between the two groups.

ÍøÆØ³Ô¹Ï LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Related Attorneys: James J. Eccleston

Tags: Eccleston, ÍøÆØ³Ô¹Ï, PIABA, SEC, arbitration

Return to Archive

TESTIMONIALS

Previous
Next
Quotes Bigger

I cannot thank you enough for your guidance. It's a good feeling knowing someone is fighting for you.

Matt J.

LATEST NEWS AND ARTICLES

1783615970 Law
July 9, 2026
FINRA Suspends Former Branch Manager for Supervisory Failures Linked to Excessive Trading and Churning

A former regional branch manager at a broker-dealer has agreed to Financial Industry Regulatory Authority (FINRA) sanctions after the regulator found that he failed to supervise registered representatives who engaged in excessive trading and churning of customer accounts.

1783525964 Law
July 8, 2026
SEC Sanctions David Lerner Associates for Regulation Best Interest Violations

David Lerner Associates has agreed to settle Securities and Exchange (SEC) charges alleging violations of Regulation Best Interest (Reg BI) that resulted in unnecessary costs to retail investors, according to InvestmentNews.

1783434190 Law
July 7, 2026
Private Credit Funds Face Mounting Redemption Pressure as Investor Sentiment Shifts

A surge in investor redemption requests has intensified pressure on private credit funds, raising concerns about liquidity and long-term stability across the asset class, as reported by The Wall Street Journal.