With the SEC's rejection of Carlyle's arbitration provision, the right of investors to litigate claims as class actions and derivative suits survives, at least for the time being. The issue however is likely to surface again, probably making its way to the Supreme Court in a short time. To moot the matter and keep shareholder actions robust and meaningful, it would be best if in the interim Congress could specifically provide that the FAA cannot pre-empt derivative suits or cases brought under the federal securities statutes.
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