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This week on the award-winning Consumer Finance Monitor Podcast, host Alan Kaplinsky is joined by Senior Counsel Mark Levin and special guest Professor Mohsen Manesh for a powerful roundtable on one of today's most consequential topics: the SEC's new position on mandatory arbitration in corporate governance documents and how state law and market realities are shaping the future for consumer financial services companies, investors, and legal counsel.
Meet the Speakers:
- Alan Kaplinsky – Host and Senior Counsel at Ballard Spahr's Consumer Financial Services Group, Alan brings decades of expertise in arbitration and class action waivers to the table.
- Mark Levin – A leading authority on arbitration provisions and regulatory compliance, Mark (now retired) was a seasoned attorney at Ballard Spahr and long-time collaborator with Alan.
- Mohsen Manesh – The L.L. Stewart Professor of Business Law at the University of Oregon, Mohsen is a nationally recognized legal scholar and co-author of a widely cited NYU Law Review article on shareholder arbitration clauses.
In This Episode, the Panel Explores:
- The SEC's Policy Shift: Why the SEC now allows mandatory arbitration provisions in registration statements, and how the focus has moved to disclosure, not the substance, of arbitration clauses.
- State Law Challenges: How Delaware's SB 95 (DGCL 115(c)) bans arbitration provisions for federal securities law claims in corporate charters, and the legislative backstory behind this move.
- Federal vs. State Authority: The panel debates whether states like Delaware can lawfully prohibit shareholder arbitration in corporate charters without being preempted by the Federal Arbitration Act (FAA).
- Practical Guidance for Issuers: The importance for issuers of providing clear, plain-language disclosures about arbitration clauses and drafting these provisions conservatively while preserving statutory remedies to address current legal and regulatory challenges.
- Market Realities and Investor Response: Despite ongoing legal debates, public companies thus far have shown little interest in reincorporating elsewhere to enable arbitration provisions, as both shareholder demand for mandatory arbitration and management support for such proposals remain limited.
- Issuer and Investor Impact: While arbitration can offer faster, more efficient, and confidential dispute resolution and reduce costly class actions, it may also limit options for class-wide remedies and restrict investor recourse.
- What's Next? With the SEC's new stance and ongoing uncertainty about the interplay with state laws, the landscape for shareholder arbitration is in flux—and this episode breaks down the key issues you need to watch.
Whether you're a legal professional, corporate executive, or investor, this episode delivers sharp insight and practical takeaways on regulatory trends that could reshape the field of consumer financial services.
Consumer Finance Monitor is hosted by Alan Kaplinsky, Senior Counsel at Ballard Spahr, and the founder and former chair of the firm's Consumer Financial Services Group. We encourage listeners to subscribe to the podcast on their preferred platform for weekly insights into developments in the consumer finance industry.
Following this episode, Professor Mohsen Manesh released a new article, The Past, Present, and Likely Future of Shareholder Arbitration, which builds directly on the insights he shared on the podcast. The full paper is available here.
To listen to this episode, click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
