Wall Street is setting a new precedent that investor claims disputes need to go to court instead of arbitration. Frontpage
Wall St. Giants like Goldman and Citigroup are having investment firms sign a contract stipulating that future legal disputes will be resolved in court as opposed to arbitration. Critics are claiming the contracts set double standards, because big banks require individual retail investors to settle things outside of court, based on which system is more likely to have a better outcome for the company. Using litigation, investment banks can also draw out proceedings for years. According to Los Angeles securities lawyer Jeffrey Riffer, investment firms prefer arbitration because unlike an individual investor, they are unlikely to gain any sympathy from a jury.
Forced into arbitration
Joseph Peiffer, the New Orleans lawyer who represented the city against Goldman, said: “They force everyone including an 80-year-old widow into arbitration, but when an institution wants to arbitrate with them they fight it tooth and nail." The court cases brought by investors since the 2008 crisis are on-going six years after the fact.