The U.S. Supreme Court will settle a circuit court split over whether punitive damages may be awarded in securities arbitrations governed by New York law
Article Abstract:
The US Supreme Court will determine whether arbitrators can impose punitive damages under New York law in Mastrobuono v. Shearson Lehman Hutton Inc. Securities arbitration is becoming common and so resolution of this issue is important. New York law disallows punitive damage awards by any entity except a court which may violate the Federal Arbitration Act by discouraging arbitration. However, punitive damages are designed to cancel profits from unidentified cases of fraud rather than to compensate the victim and therefore are public policy better left to the courts.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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Investors' choice of ADR forums may be limited: brokerage firms use customer contracts and the courts to limit arbitrations to industry SROs
Article Abstract:
Most arbitration clauses for disputes between brokerage firms and investors direct the issue to a self-regulatory organization (SROs) but investors may be able to select the American Arbitration Assn (AAA), a non-industry forum. AAA has recently revised its arbitration rules to be more similar to those of SROs but significant differences remain. AAA forums are allowed to address more issues than SROs, have broader discovery rules and make awards publicly available.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1995
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When punitive damages are entirely appropriate
Article Abstract:
The purpose of punitive damages is to deter intentional torts, not to compensate the victim. When a seller's income decreases as a result of the consumer's loss, punitive damages may be called for. In the case of vicarious liability, punitive damages may be warranted in the event of an employer's complicity in the wrongdoing. Securities churning is an example of a wrong which may warrant punitive damages.
Publication Name: The National Law Journal
Subject: Law
ISSN: 0162-7325
Year: 1992
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