SEC Policy Change to Gut Shareholder Rights

On September 17, 2025, the Securities and Exchange Commission (SEC) changed its longstanding shareholder forced arbitration policy. The new policy is a radical shift that puts investors at risk of massive losses, shields companies that commit fraud from public accountability, and could depress shareholder value and stock prices while undermining confidence in our capital markets.

This stark reversal from the Commission’s well-established, decades-old policy will inject chaos into U.S. markets, creating a more volatile environment for investors, shareholders, and businesses – and any company that includes a forced arbitration provision in its IPO filing will face legal challenges that will delay the offering indefinitely and result in significant risk and expense.

Resources

• Talking Points: AAJ’s Response 
• What They’re Saying: Stakeholders on SEC Policy Change
• CII Post on LinkedIn
• CII Statement: The Council of Institutional Investors issued a statement on their website, "Safeguarding Investors' Legal Rights."
• ICGN Letter: The International Corporate Governance Network sent a letter to SEC Chair Paul Atkins and the agency's three commissioners, which was covered in multiple press outlets.
• Better Markets Fact Sheet: The SEC’s Attempt to Kill Securities Class Actions Through Mandatory Arbitration Violates Congressional Action
  

In the News

• Opposition Builds to Atkins' Corporate Governance Reforms
• International investor group raises concerns over SEC mandatory arbitration, proxy-voting moves
• SEC’s ‘Make IPOs Great Again’ Plan Hits Shutdown Stumbling Block
• Investor Advocates Criticize SEC's New Arbitration Stance
• SEC Chief Fast Tracks Agenda, Averting Slog Through Rule Changes
• SEC's new stance on mandatory arbitration changes risk landscape for IPOs, attracts D&O market attention
• New York Pension Funds Ask SEC to Ax Curbs on Investor Suits
• Institutional Investors Rip SEC's 'Radical' Forced Arb. Policy
• More than 60 state officials and pension funds criticize SEC’s new mandatory arbitration policy
• UK pension funds among investors to slam SEC U-turn on shareholder arbitration