Bloomberg Law: Investor Attorneys Slam SEC Curbing Court Access Over IPO Fraud

With the US Securities and Exchange Commission greenlighting the use of mandatory arbitration clauses for newly public companies, securities litigation experts are waiting to see whether any company is willing to risk the almost inevitable legal blowback that will come with taking advantage of the shift in policy. O’Melveny vice chair and Securities Litigation and Financial Services Practice co-chair Matthew Close told Bloomberg Law that a company wanting to take advantage of the new ability to add an arbitration provision has to face several considerations, including whether that step is allowed in its state of incorporation. He noted that there will likely be “a small number of companies that are the tip of the spear that add these provisions, knowing that it will attract litigation.”

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