Monday, March 20, 2006

"Spitzer vs. the Little Guys"

That's the title of a terrific op-ed piece today in the Wall Street Journal by Jacob Zamansky, the noted plaintiff's lawyer. Zamansky points out that despite all the hype over Eliot Spitzer's settlement with Wall Street firms over their tainted research, "it has become apparent that Wall Street successfully played Mr. Spitzer as a sucker."

Zamansky puts his finger on the reasons for that, one of which was that Spitzer did not require the firms to admit liability. That put small investors at a disadvantage when they pursued their claims in the stacked-deck arbitration system.

Frankly I'm not sure investors would have had a slam dunk even if the firms had admitted liability. However, I think his point concerning arbitration is correct. The unfairness of mandatory arbitration is one of the issues that I explore in Wall Street Versus America. If the system is as fair as the Street says it is, why not make it voluntary?

Zamansky goes on to make some pointed comments about Spitzer's Grasso litigation, noting that it benefits the millionaire owners of the NYSE: "If Mr. Spitzer were truly committed to reform, he'd insist the NYSE become more responsive to individual shareholders's needs as a condition of his involvement in the pursuit of Mr. Grasso."

Great piece. Here's a link.

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Wall Street Versus America will be published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site.

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