Stanley Forman Reed

Name: Wilko v. Swan — Opinion of the Court
Author: Stanley Forman Reed

Summary

“Wilko v. Swan — Opinion of the Court”, is a work by Stanley Forman Reed. It explores elements such as the Securities Act, arbitration and controversy.

Quotes from Wilko v. Swan — Opinion of the Court (Stanley Forman Reed)

Stanley Forman Reed, Wilko v. Swan — Opinion of the Court

“ While a buyer and seller of securities, under some circumstances, may deal at arm's length on equal terms, it is clear that the Securities Act was drafted with an eye to the disadvantages under which buyers labor. Issuers of and dealers in securities have better opportunities to investigate and appraise the prospective earnings and business plans affecting securities than buyers. It is therefore reasonable for Congress to put buyers of securities covered by that Act on a different basis from other purchasers. ”

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Source: Wikisource

Stanley Forman Reed, Wilko v. Swan — Opinion of the Court

“ On the other hand, it has enacted the Securities Act to protect the rights of investors and has forbidden a waiver of any of those rights. Recognizing the advantages that prior agreements for arbitration may provide for the solution of commercial controversies, we decide that the intention of Congress concerning the sale of securities is better carried out by holding invalid such an agreement for arbitration of issues arising under the Act. ”

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Source: Wikisource

Stanley Forman Reed, Wilko v. Swan — Opinion of the Court

“ Petitioner argues that § 14, note 6, supra, shows that the purpose of Congress was to assure that sellers could not maneuver buyers into a position that might weaken their ability to recover under the Securities Act. He contends that arbitration lacks the certainty of a suit at law under the Act to enforce his rights. He reasons that the arbitration paragraph of the margin agreement is a stipulation that waives 'compliance with' the provision of the Securities Act, set out in the margin, conferring jurisdiction of suits and special powers. ”

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Source: Wikisource

Stanley Forman Reed, Wilko v. Swan — Opinion of the Court

“ Power to vacate an award is limited. [22] While it may be true, as the Court of Appeals thought, that a failure of the arbitrators to decide in accordance with the provisions of the Securities Act would 'constitute grounds for vacating the award pursuant to section 10 of the Federal Arbitration Act,' [23] that failure would need to be made clearly to appear. ”

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Source: Wikisource

Stanley Forman Reed, Wilko v. Swan — Opinion of the Court

“ By the terms of the agreement to arbitrate, petitioner is restricted in his choice of forum prior to the existence of a controversy. While the Securities Act does not require petitioner to sue, [30] a waiver in advance of a controversy stands upon a different footing. ”

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Source: Wikisource

Stanley Forman Reed, Wilko v. Swan — Opinion of the Court

“ Congress has afforded participants in transactions subject to its legislative power an opportunity generally to secure prompt, economical and adequate solution of controversies through arbitration if the parties are willing to accept less certainty of legally correct adjustment. ”

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Source: Wikisource

Stanley Forman Reed, Wilko v. Swan — Opinion of the Court

“ They must be not only determined but applied by the arbitrators without judicial instruction on the law. As their award may be made without explanation of their reasons and without a complete record of their proceedings, the arbitrators' conception of the legal meaning of such statutory requirements as 'burden of proof,' 'reasonable care' or 'material fact,' see, note 1, supra, cannot be examined. ”

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Source: Wikisource

Stanley Forman Reed, Wilko v. Swan — Opinion of the Court

“ Each may function within its own scope, the former to protect investors and the latter to simplify recovery for actionable violations of law by issuers or dealers in securities.
Respondent is in agreement with the Court of Appeals that the margin agreement arbitration paragraph, note 15, supra, does not relieve the seller from either liability or burden of proof, note 1, supra, imposed by the Securities Act. ”

Stanley Forman Reed

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