A federal judge is dismissing a lawsuit that sought to undo California´s strict arbitration standards for resolving securities disputes. The suit was brought by the New York Stock Exchange and the National Association of Securities Dealers.
The state´s Judicial Council adopted the new guidelines, which became effective in July.
The exchange and association had said California had no authority to write its own arbitration laws. But U.S. District Judge Samuel Conti ruled today that the council could not be sued. The decision could be a step toward ending a growing controversy. Hundreds of claims by California investors have been delayed because of the conflict.
Brokerage contracts generally require that investor complaints be handled through arbitration.