Shearson/American Express Inc. v. McMahon

Justice Blackmun,

with whom Justice Brennan and Justice Marshall join, concurring in part and dissenting in part.

I concur in the Court’s decision to enforce the arbitration agreement with respect to respondents’ RICO claims and thus *243 join Parts I, II, and IV of the Court’s opinion. I disagree, however, with the Court’s conclusion that respondents’ § 10(b) claims also are subject to arbitration.

Both the Securities Act of 1933 and the Securities Exchange Act of 1934 were enacted to protect investors from predatory behavior of securities industry personnel. In Wilko v. Swan, 346 U. S. 427 (1953), the Court recognized this basic purpose when it declined to enforce a predispute agreement to compel arbitration of claims under the Securities Act. Following that decision, lower courts extended Wilko’s reasoning to claims brought under § 10(b) of the Exchange Act, and Congress approved of this extension. In today’s decision, however, the Court effectively overrules Wilko by accepting the Securities and Exchange Commission’s newly adopted position that arbitration procedures in the securities industry and the Commission’s oversight of the self-regulatory organizations (SROs) have improved greatly since Wilko was decided. The Court thus approves the abandonment of the judiciary’s role in the resolution of claims under the Exchange Act and leaves such claims to the arbitral forum of the securities industry at a time when the industry’s abuses towards investors are more apparent than ever.

I

At the outset, it is useful to review the manner by which the issue decided today has been kept alive inappropriately by this Court. As the majority explains, Wilko was limited to the holding “that a predispute agreement could not be enforced to compel arbitration of a claim arising under § 12(2) of the Securities Act.” Ante, at 228. Relying, however, on the reasoning of Wilko and the similarity between the pertinent provisions of the Securities Act and those of the Exchange Act, lower courts extended the Wilko holding to claims under the Exchange Act and refused to enforce pre-dispute agreements to arbitrate them as well. See, e. g., Greater Continental Corp. v. Schechter, 422 F. 2d 1100, 1103 *244 (CA2 1970) (dicta); Moran v. Paine, Webber, Jackson & Curtis, 389 F. 2d 242, 245-246 (CA3 1968).

In Scherk v. Alberto-Culver Co., 417 U. S. 506 (1974), the Court addressed the question whether a particular pre-dispute agreement to arbitrate § 10(b) claims should be enforced. Because that litigation involved international business concerns and because the case was decided on such grounds, the Court did not reach the issue of the extension of Wilko to § 10(b) claims. The Court, nonetheless, included in its opinion dicta noting that “a colorable argument could be made that even the semantic reasoning of the Wilko opinion does not control the case before us.” 417 U. S., at 513 . There is no need to discuss in any detail that “colorable argument,” which rests on alleged distinctions between pertinent provisions of the Securities Act and those of the Exchange Act, because the Court does not rely upon it today. 1 In fact, *245 the “argument” is important not so much for its substance 2 as it is for its litigation role. It simply constituted a way of keeping the issue of the arbitrability of § 10(b) claims alive for those opposed to the result in Wilko .

*246 If, however, there could have been any doubts about the extension of Wilko’s holding to § 10(b) claims, they were undermined by Congress in its 1975 amendments to the Exchange Act. The Court questions the significance of these amendments, which, as it notes, concerned, among other things, provisions dealing with dispute resolution and disciplinary action by an SRO towards its own members. See ante, at 235-236. These amendments, however, are regarded as “the ‘most substantial and significant revision of this country’s Federal securities laws since the passage of the Securities Exchange Act in 1934.’” Herman & MacLean v. Huddleston, 459 U. S. 375, 384-385 (1983), quoting Securities Acts Amendments of 1975: Hearings on S. 249 before the Subcommittee on Securities of the Senate Committee on Banking, Housing and Urban Affairs, 94th Cong., 1st Sess., 1 (1975) (Hearings). 3 More importantly, in enacting these amendments, Congress specifically was considering exceptions to § 29(a), 15 U. S. C. § 78cc, the nonwaiver provision of the Exchange Act, a provision primarily designed with the protection of investors in mind. 4 The statement from the *247 legislative history, cited by the Court, ante, at 236-237, on its face indicates that Congress did not want the amendments to overrule Wilko . Moreover, the fact that this statement was made in an amendment to the Exchange Act suggests that Congress was aware of the extension of Wilko to § 10(b) claims. Although the remark does not necessarily signify Congress’ endorsement of this extension, in the absence of any prior congressional indication to the contrary, it implies that Congress was not concerned with arresting this trend. 5 Such inaction during a wholesale revision of the securities laws, a revision designed to further investor protection, would argue in favor of Congress’ approval of Wilko and its extension to § 10(b) claims. See Wolfe v. E. F. Hutton & Co., 800 F. 2d 1032, 1037-1038 (CA11 1986) (en banc), cert. *248 pending, No. 86-1218; cf. Herman & MacLean v. Huddleston, 459 U. S., at 384-386 .

One would have thought that, after these amendments, the matter of Wilko’s extension to Exchange Act claims at last would be uncontroversial. In the years following the Scherk decision, all the Courts of Appeals treating the issue so interpreted Wilko. 6 In Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213 (1985), this Court declined to address the extension issue, which was not before it, but recognized the development in the case law. Id., at 215, n. 1 . Yet, like a ghost reluctant to accept its eternal rest, the “colorable argument” surfaced again, this time in a concurring opinion. See id., at 224 (White, J.). That concurring opinion repeated the “argument,” but with no more development than the Scherk Court had given it. 7 Where there had been uniformity in *249 the lower courts before Byrd , there now appeared disharmony on the issue of the arbitrability of § 10(b) claims. 8 And, as the Court observes, see ante, at 225, we granted cer-tiorari in this case to resolve this conflict among the Courts of Appeals.

II

There are essentially two problems with the Court’s conclusion that predispute agreements to arbitrate § 10(b) claims may be enforced. First, the Court gives Wilko an overly narrow reading so that it can fit into the syllogism offered by the Commission and accepted by the Court, namely, (1) Wilko *250 was really a case concerning whether arbitration was adequate for the enforcement of the substantive provisions of the securities laws; (2) all of the Wilko Court’s doubts as to arbitration’s adequacy are outdated; (3) thus Wilko is no longer good law. See ante, at 228-229, 232; Brief for Securities and Exchange Commission as Amicus Curiae 10. Second, the Court accepts uncritically petitioners’ and the Commission’s argument that the problems with arbitration, highlighted by the Wilko Court, either no longer exist or are not now viewed as problems by the Court. This acceptance primarily is based upon the Court’s belief in the Commission’s representations that its oversight of the SROs ensures the adequacy of arbitration.

A

I agree with the Court’s observation that, in order to establish an exception to the Arbitration Act, 9 U. S. C. § 1 et seq., for a class of statutory claims, there must be “an intention discernible from the text, history, or purposes of the statute.” Ante, at 227. Where the Court first goes wrong, however, is in its failure to acknowledge that the Exchange Act, like the Securities Act, constitutes such an exception. This failure is made possible only by the unduly narrow reading of Wilko that ignores the Court’s determination there that the Securities Act was an exception to the Arbitration Act. The Court’s reading is particularly startling because it is in direct contradiction to the interpretation of Wilko given by the Court in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614 (1985), a decision on which the Court relies for its strong statement of a federal policy in favor of arbitration. But we observed in Mitsubishi:

“Just as it is the congressional policy manifested in the Federal Arbitration Act that requires courts liberally to construe the scope of arbitration agreements covered by that Act, it is the congressional intention expressed in some other statute on which the courts must rely to identify any category of claims as to which agreements to ar *251 bitrate will be held unenforceable. See Wilko v. Swan, 346 U. S., at 434 -435 .... We must assume that if Congress intended the substantive protection afforded by a given statute to include protection against waiver of the right to a judicial forum, that intention will be deducible from text or legislative history. See Wilko v. Swan, supra.” Id., at 627-628.

Such language clearly suggests that, in Mitsubishi, we viewed Wilko as holding that the text and legislative history of the Securities Act — not general problems with arbitration-established that the Securities Act constituted an exception to the Arbitration Act. In a surprising display of logic, the Court uses Mitsubishi as support for the virtues of arbitration and thus as a means for undermining Wilko’s holding, but fails to take into account the most pertinent language in Mitsubishi.

It is not necessary to rely just on the statement in Mitsubishi to realize that in Wilko the Court had before it the issue of congressional intent to exempt statutory claims from the reach of the Arbitration Act. One has only to reread the Wilko opinion without the constricted vision of the Court. The Court’s misreading is possible because, while extolling the policies of the Arbitration Act, it is insensitive to, and disregards the policies of, the Securities Act. This Act was passed in 1933, eight years after the Arbitration Act of 1925, see 43 Stat. 883 , and in response to the market crash of 1929. The Act was designed to remedy abuses in the securities industry, particularly fraud and misrepresentation by securities-industry personnel, that had contributed to that disastrous event. See Malcolm & Segail 730-731. It had as its main goal investor protection, which took the form of an effort to place investors on an equal footing with those in the securities industry by promoting full disclosure of information on investments. See L. Loss, Fundamentals of Securities Regulation 36 (1983).

*252 The Court in Wilko recognized the policy of investor protection in the Securities Act. It was this recognition that animated its discussion of whether § 14, 48 Stat. 84 , 15 U. S. C. § 77n, the nonwaiver provision of the Securities Act, applied to § 22(a), 48 Stat. 86 , as amended, 15 U. S. C. §77v(a), the provision that gave an investor a judicial forum for the resolution of securities disputes. In the Court’s words, the Securities Act, “[djesigned to protect investors, . . . requires issuers, underwriters, and dealers to make full and fair disclosure of the character of securities sold in interstate and foreign commerce and to prevent fraud in their sale.” 346 U. S., at 431 . The Court then noted that, to promote this policy in the Act, Congress had designed an elaborate statutory structure: it gave investors a “special right” of suit under § 12(2); they could bring the suit in federal or state court pursuant to § 22(a); and, if brought in federal court, there were numerous procedural advantages, such as nationwide service of process. Ibid. In reasoning that a pre-dispute agreement to arbitrate § 12(2) claims would constitute a “waiver” of a provision of the Act, i. e., the right to the judicial forum embodied in § 22(a), the Court specifically referred to the policy of investor protection underlying the Act:

“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.

“When the security buyer, prior to any violation of the Securities Act, waives his right to sue in courts, he gives up more than would a participant in other business transactions. The security buyer has a wider choice of courts *253 and venue. He thus surrenders one of the advantages the Act gives him and surrenders it at a time when he is less able to judge the weight of the handicap the Securities Act places upon his adversary.” Id., at 435.

In the Court’s view, the express language, legislative history, and purposes of the Securities Act all made predispute agreements to arbitrate § 12(2) claims unenforceable despite the presence of the Arbitration Act. 9

*254 Accordingly, the Court seriously errs when it states that the result in Wilko turned only on the perceived inadequacy of arbitration for the enforcement of § 12(2) claims. It is true that the Wilko Court discussed the inadequacies of this process, 346 U. S., at 435-437 , and that this discussion constituted one ground for the Court’s decision. The discussion, however, occurred after the Court had concluded that the language, legislative history, and purposes of the Securities Act mandated an exception to the Arbitration Act for these securities claims.

The Court’s decision in Scherk is consistent with this reading of Wilko , despite the Court’s suggestion to the contrary. See ante, at 229. Indeed, in reading Scherk as a case turning on the adequacy of arbitration, the Court completely ignores the central thrust of that decision. As the Court itself notes, ante, at 229, in Scherk the Court assumed that Wilko’s prohibition on enforcing predispute arbitration agreements ordinarily would extend to § 10(b) claims, such as those at issue in Scherk . The Scherk Court relied on a crucial difference between the international business situation presented to it and that before the Court in Wilko , where the laws of the United States, particularly the securities laws, clearly governed the dispute. Scherk , in contrast, presented *255 a multinational conflict-of-laws puzzle. 10 In such a situation, the Court observed, a contract provision setting forth a particular forum and the law to apply for possible disputes was “an almost indispensable precondition to achievement of the orderliness and predictability essential to any international business transaction.” 417 U. S., at 516 . Indeed, the Court thought that failure to enforce such an agreement to arbitrate in this international context would encourage companies to file suits in countries where the law was most favorable to them, which “would surely damage the fabric of international commerce and trade, and imperil the willingness and ability of businessmen to enter into international commercial agreements.” Id., at 517 . Accordingly, the Scherk decision turned on the special nature of agreements to arbitrate in the international commercial context. 11

*256 In light of a proper reading of Wilko , the pertinent question then becomes whether the language, legislative history, and purposes of the Exchange Act call for an exception to the Arbitration Act for § 10(b) claims. The Exchange Act waiver provision is virtually identical to that of the Securities Act. 12 More importantly, the same concern with investor protection that motivated the Securities Act is evident in the Exchange Act, although the latter, in contrast to the former, is aimed at trading in the secondary securities market. See Ernst & Ernst v. Hochfelder, 425 U. S. 185, 195 (1976). We have recognized that both Acts were designed with this common purpose in mind. See id., at 206 (“The 1933 and 1934 Acts constitute interrelated components of the federal regulatory scheme governing transactions in securities”). Indeed, the application of both Acts to the same conduct, see Brown, Shell, & Tyson 16, suggests that they have the same basic goal. And we have approved a cumulative construction of remedies under the securities Acts to promote the maximum possible protection of investors. See Herman & MacLean v. Huddleston, 459 U. S., at 384-385 . 13

In sum, the same reasons that led the Court to find an exception to the Arbitration Act for § 12(2) claims exist for *257 § 10(b) claims as well. It is clear that Wilko , when properly-read, governs the instant case and mandates that a pre-dispute arbitration agreement should not be enforced as to § 10(b) claims.

B

Even if I were to accept the Court’s narrow reading of Wilko as a case dealing only with the inadequacies of arbitration in 1953, 14 I do not think that this case should be resolved differently today so long as the policy of investor protection is given proper consideration in the analysis. Despite improvements in the process of arbitration and changes in the judicial attitude towards it, several aspects of arbitration that were seen by the Wilko court to be inimical to the policy of investor protection still remain. Moreover, I have serious reservations about the Commission’s contention that its oversight of the SROs’ arbitration procedures will ensure that the process is adequate to protect an investor’s rights under the securities Acts.

As the Court observes, ante, at 231, in Wilko the Court was disturbed by several characteristics of arbitration that made such a process inadequate to safeguard the special position in which the Securities Act had placed the investor. The Court concluded that judicial review of the arbitrators’ application of the securities laws would be difficult because arbitrators were required neither to give the reasons for their decisions nor to make a complete record of their proceedings. See 346 U. S., at 436 . The Court also observed that the grounds for vacating an arbitration award were limited. The Court noted that, under the Arbitration Act, there were only *258 four grounds for vacation of an award: fraud in procuring the award, partiality on the part of arbitrators, gross misconduct by arbitrators, and the failure of arbitrators to render a final decision. Id., at 436, n. 22 , quoting9 U. S. C. § 10 (1952 ed., Supp. V). The arbitrators’ interpretation of the law would be subject to judicial review only under the “manifest disregard” standard. 346 U. S., at 436 .

The Court today appears to argue that the Wilko Court’s assessment of arbitration’s inadequacy is outdated, first, because arbitration has improved since 1953, and second, because the Court no longer considers the criticisms of arbitration made in Wilko to be valid reasons why statutory claims, such as those under § 10(b), should not be sent to arbitration. 15 It is true that arbitration procedures in the securities industry have improved since Wilko’s day. Of particular importance has been the development of a code of arbitration by the Commission with the assistance of representatives of the securities industry and the public. See Uniform Code of Arbitration, Exh. C, Fifth Report of the Securities Industry Conference on Arbitration 29 (Apr. 1986) (Fifth SICA Report). 16

*259 Even those who favor the arbitration of securities claims do not contend, however, that arbitration has changed so significantly as to eliminate the essential characteristics noted by the Wilko Court. Indeed, proponents of arbitration would not see these characteristics as “problems,” because, in their view, the characteristics permit the unique “streamlined” nature of the arbitral process. As at the time of Wilko , preparation of a record of arbitration proceedings is not invariably required today. 17 Moreover, arbitrators are not bound by precedent and are actually discouraged by their associations from giving reasons for a decision. See R. Coul-son, Business Arbitration — What You Need to Know 29 (3d ed. 1986) (“Written opinions can be dangerous because they identify targets for the losing party to attack”); see also Duke Note 553; Fletcher 456-457. Judicial review is still substantially limited to the four grounds listed in § 10 of the Arbitration Act and to the concept of “manifest disregard” of the law. See, e. g., French v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 784 F. 2d 902, 906 (CA9 1986), citing Swift Industries, Inc. v. Botany Industries, Inc., 466 F. 2d 1125, 1131 (CA3 1972) (an arbitrator’s decision must be upheld unless it is “‘completely irrational’”). 18

*260 The Court’s “mistrust” of arbitration may have given way recently to an acceptance of this process, not only because of the improvements in arbitration, but also because of the Court’s present assumption that the distinctive features of arbitration, its more quick and economical resolution of claims, do not render it inherently inadequate for the resolution of statutory claims. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S., at 633 . Such reasoning, however, should prevail only in the absence of the congressional policy that places the statutory claimant in a special position with respect to possible violators of his statutory rights. As even the most ardent supporter of arbitration would recognize, the arbitral process at best places the investor on an equal footing with the securities-industry personnel against whom the claims are brought.

Furthermore, there remains the danger that, at worst, compelling an investor to arbitrate securities claims puts him in a forum controlled by the securities industry. This result directly contradicts the goal of both securities Acts to free the investor from the control of the market professional. The Uniform Code provides some safeguards 19 but despite them, and indeed because of the background of the arbitrators, the investor has the impression, frequently justified, that his claims are being judged by a forum composed of individuals sympathetic to the securities industry and not drawn *261 from the public. It is generally recognized that the codes do not define who falls into the category “not from the securities industry.” Brown, Shell, & Tyson 35, and n. 94; Katsoris 309-312. Accordingly, it is often possible for the “public” arbitrators to be attorneys or consultants whose clients have been exchange members or SROs. See Panel of Arbitrators 1987-1988, CCH American Stock Exchange Guide 158-160 (1987) (71 out of 116 “public” arbitrators are lawyers). The uniform opposition of investors to compelled arbitration and the overwhelming support of the securities industry for the process suggest that there must be some truth to the investors’ belief that the securities industry has an advantage in a forum under its own control. See N. Y. Times, Mar. 29, 1987, section 3, p. 8, col. 1 (statement of Sheldon H. Elsen, Chairman, American Bar Association Task Force on Securities Arbitration: “The houses basically like the present system because they own the stacked deck”). 20

More surprising than the Court’s acceptance of the present adequacy of arbitration for the resolution of securities claims is its confidence in the Commission’s oversight of the arbitration procedures of the SROs to ensure this adequacy. Such confidence amounts to a wholesale acceptance of the Commission’s present position that this oversight undermines the force of Wilko and that arbitration therefore should be compelled because the Commission has supervisory authority *262 over the SROs’ arbitration procedures. The Court, however, fails to acknowledge that, until it filed an amicus brief in this case, the Commission consistently took the position that § 10(b) claims, like those under § 12(2), should not be sent to arbitration, that predispute arbitration agreements, where the investor was not advised of his right to a judicial forum, were misleading, and that the very regulatory oversight upon which the Commission now relies could not alone make securities-industry arbitration adequate. 21 It is most questionable, then, whether the Commission’s recently adopted position is entitled to the deference that the Court accords it.

The Court is swayed by the power given to the Commission by the 1975 amendments to the Exchange Act in order to permit the Commission to oversee the rules and procedures of the SROs, including those dealing with arbitration. See ante, at 233-234. Subsequent to the passage of these amendments, however, the Commission has taken the consistent position that predispute arbitration agreements, *263 which did not disclose to an investor that he has a right to a judicial forum, were misleading and possibly actionable under the securities laws. 22 The Commission remained dissatis *264 fied with the continued use of these arbitration agreements and eventually it proposed a rule to prohibit them, explaining that such a prohibition was not inconsistent with its support of arbitration for resolving securities disputes, particularly existing ones. See Disclosure Regarding Recourse to the Federal Courts Notwithstanding Arbitration Clauses in Broker-Dealer Customer Agreements, SEC Exchange Act Rel. No. 19813 (May 26, 1983), [1982-1983 Transfer Binder] CCH Fed. Sec. L. Rep. ¶ 83,356 , p. 85,967. While emphasizing the Court’s Wilko decision as a basis for its proposed rule, the Commission noted that its proposal also was in line with its own understanding of the problems with such agreements and with the “[congressional determination that public investors should also have available the special protection of the federal courts for resolution of disputes arising under the federal securities laws.” Id., at p. 85,968. Although the rule met with some opposition, 23 it was adopted and remains in force today, 24

*265 Moreover, the Commission’s own description of its enforcement capabilities contradicts its position that its general overview of SRO rules and procedures can make arbitration adequate for resolving securities claims. The Commission does not pretend that its oversight consists of anything other than a general review of SRO rules and the ability to require that an SRO adopt or delete a particular rule. It does not contend that its “sweeping authority,” Brief 16, includes a review of specific arbitration proceedings. It thus neither polices nor monitors the results of these arbitrations for possible misapplications of securities laws or for indications of how investors fare in these proceedings. Given, in fact, the present constraints on the Commission’s resources in this time of market expansion, see General Accounting Office, Report to the Chairman, Subcommittee on Telecommunications, Consumer Protection, and Finance of the House Committee on Energy and Commerce: Securities Regulation — Securities and Exchange Commission Oversight of Self-Regulation 60 (1986) (Report), it is doubtful whether the Commission could undertake to conduct any such review. 25

Finally, the Court’s complacent acceptance of the Commission’s oversight is alarming when almost every day brings another example of illegality on Wall Street. See, e. g., N. Y. Times, Jan. 2, 1987, p. B6, col. 3. Many of the abuses re *266 cently brought to light, it is true, do not deal with the question of the adequacy of SRO arbitration. They, however, do suggest that the industry’s self-regulation, of which the SRO arbitration is a part, is not functioning acceptably. See Report 63. Moreover, these abuses have highlighted the difficulty experienced by the Commission, at a time of growth in the securities market and a decrease in the Commission’s staff, see id., at 60-61, to carry out its oversight task. Such inadequacies on the part of the Commission strike at the very heart of the reasoning of the Court, which is content to accept the soothing assurances of the Commission without examining the reality behind them. Indeed, while the amici cite the number of arbitrations of securities disputes as a sign of the success of this process in the industry, see Brief for Securities Industry Association, Inc., et al. as Amici Curiae 10-11, these statistics have a more portentous meaning. In this era of deregulation, the growth in complaints about the securities industry, many of which find their way to arbitration, parallels the increase in securities violations and suggests a market not adequately controlled by the SROs. See General Accounting Office, Report to the Chairman, Subcommittee on Oversight and Investigation of the House Committee on Energy and Commerce: Statistics on SEC’s Enforcement Program 3-4 (1985). In such a time, one would expect more, not less, judicial involvement in resolution of securities disputes.

Ill

There is, fortunately, a remedy for investors. In part as a result of the Commission’s position in this case, Congress has begun to look into the adequacy of the self-regulatory arbitration and the Commission’s oversight of the SROs. In a letter dated February 11, 1987, Representative Dingell, Chairman of the House Subcommittee on Oversight and Investigations, notified the Chairman of the Commission that the Subcommittee is “conducting an inquiry into the adequacy of the current self-regulatory system and the Commis *267 sion’s oversight thereof in connection with complaints against broker-dealers for securities-law violations.” Letter, p. 1, enclosed with Letter from Theodore G. Eppenstein, counsel for respondents, to Joseph F. Spaniol, Jr., Clerk of this Court (Mar. 2, 1987). Representative Dingell noted that his Subcommittee was “particularly concerned about increasing numbers of complaints in connection with churning and violations of suitability requirements, as well as complaints that arbitration procedures are rife with conflicts of interest (since the arbitrators are peers of the brokerage firm being sued) and are inadequate to enforce the statutory rights of customers against broker-dealers.” Ibid. To justify this inquiry, he cited several well-publicized examples of abuse of investors by securities-industry personnel and a General Accounting Office report on the increase in securities-law violations by brokers that went undetected by the SROs. In concluding the letter, Representative Dingell expressed his surprise at the Commission’s position in the present case. In his view, that position was at odds with the one the Commission consistently had taken before the Subcommittee, which stressed the limitations on the Commission’s authority over the SROs in general, and over arbitrations in particular. Id., at 3. Thus, there is hope that Congress will give investors the relief that the Court denies them today.

In the meantime, the Court leaves lower courts with some authority, albeit limited, to protect investors before Congress acts. Courts should take seriously their duty to review the results of arbitration to the extent possible under the Arbitration Act. As we explained in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., “courts should remain attuned to well-supported claims that the agreement to arbitrate resulted from the sort of fraud or overwhelming economic power that would provide grounds ‘for the revocation of any contract.’” 473 U. S., at 627 , quoting 9 U. S. C. § 2 . Indeed, in light of today’s decision compelling the enforcement of predispute arbitration agreements, it is likely *268 that investors will be inclined, more than ever, to bring complaints to federal courts that arbitrators were partial or acted in “manifest disregard” of the securities laws. See Brown, Shell, & Tyson 36. It is thus ironic that the Court’s decision, no doubt animated by its desire to rid the federal courts of these suits, actually may increase litigation about arbitration.

I therefore respectfully dissent in part.

The “colorable argument” amounted to a listing by the Scherk Court of the differences between a § 12(2) action, as it had been described by the Wilko Court, and a § 10(b) action under the Exchange Act. First, the Court noted that, while § 12(2) of the Securities Act provided an express cause of action, § 10(b) did not contain on its face such a cause of action, which, instead, had been implied from its language and that of Rule 10b-5. Scherk v. Alberto-Culver Co., 417 U. S. 506, 513 (1974). Second, the Court explained that the Exchange Act did not set forth the “special right” that the Wilko Court found established in § 12(2). 417 U. S., at 513-514 ; see also Wilko v. Swan, 346 U. S. 427, 431 (1953) (§ 12(2) right viewed as “special” because of differences between that right and a common-law cause of action, differences that favored the investor). Finally, the Court observed that the jurisdictional provisions of the two Acts were not the same. 417 U. S., at 514 . Under § 22(a) of the Securities Act, 48 Stat. 86 , as amended, 15 U. S. C. § 77v(a), suit could be brought in federal or state court, whereas, under § 27 of the Exchange Act, 48 Stat. 902 , as amended, 15 U. S. C. § 78aa, suit could be brought only in federal court. In sum, the overall thrust of the “colorable argument,” as stated by the Court in Scherk , seemed to be as follows: The Wilko Court declined to enforce arbitration of § 12(2) claims because it found significant the special nature of that cause of action, but a similar concern does not apply to § 10(b) claims, which are neither “special” nor “express.”

That the Court passes over the “colorable argument” in silence, although petitioners have advanced it, see Brief for Petitioners 19-28, would appear to relegate that argument to its proper place in the graveyard of ideas. As the Commission explains in its brief, see Brief for Securities and Exchange Commission as Amicus Curiae 22-23, and nn. 18-19 (Brief), the procedural protections surrounding a § 10(b) action and its difference from a common-law action are as pronounced as those of a § 12(2) claim. More importantly, “Section 10(b) is just as much a ‘provision’ of the 1934 Act, with which persons trading in securities are required to ‘comply,’ as Section 12(2) is of the 1933 Act.” Brief 24. To state otherwise “might be interpreted as suggesting that the Section 10(b) implied right of action is somehow inferior to express rights,” which is “incompatible with the importance of the Section 10(b) remedy in the arsenal of securities law protections.” Id., at 26. And the difference in the jurisdictional provisions is not significant: as the Commission explains, the proper question is whether a § 10(b) or § 12(2) claimant is entitled to a judicial forum, not whether the claimant has a choice between judicial fora. Brief 22, n. 17. In fact, the limitation of § 10(b) actions to federal court argues against enforcing predispute arbitration agreements as to such actions. Because Congress gave the federal courts exclusive jurisdiction over § 10(b) claims, it may have intended them to develop an exclusive jurisprudence of § 10(b). See, e. g., Conover v. Dean Witter Reynolds, Inc., 794 F. 2d 520, 527 (CA9 1986), cert. pending, No. 86-321.

Commentators, almost uniformly, have rejected the “colorable argument.” See, e. g., Comment, Predispute Arbitration Agreements Between Brokers and Investors: The Extension of Wilko to Section 10(b) Claims, 46 Md. L. Rev. 339 , 364-366 (1987) (Maryland Comment); Brown, Shell, & Tyson, Arbitration of Customer-Broker Disputes Arising Under the Federal Securities Laws and RICO, 15 Sec. Reg. L. J. 3, 18-19 (1987) (Brown, Shell, & Tyson); Malcolm & Segall, The Arbitrability of Claims Arising Under Section 10(b) of the Securities Exchange Act: Should Wilko Be Extended?, 50 Albany L. Rev. 725, 748-751 (1986) (Malcolm & Segall); Note, Arbitrability of Claims Arising Under the Securities Exchange Act of 1934, 1986 Duke L. J. 548, 565-570 (Duke Note). But see Note, Arbi-trability of Implied Rights of Action Under Section 10(b) of the Securities Exchange Act, 61 N. Y. U. L. Rev. 506, 520-526 (1986).

Senator Williams, Chairman of the Subcommittee, observed:

“This legislation represents the product of nearly 4 years of studies, investigations, and hearings. It has been carefully designed to improve the efficiency of the securities markets and to increase investor protection. It is reform legislation in the very best sense, for it will lay the foundation for a stronger and more profitable securities industry while assuring that investors are more economically and effectively served.” Hearings 1.

The text of one of the amendments suggests that Congress had investors in mind when making them. Although, as the Court observes, ante, at 235-236, § 28(b) deals only with disputes among securities-industry professionals, the amendment to § 15B, which permitted arbitration among municipal-securities brokers-dealers, provided that “no person other than a municipal securities broker, municipal securities dealer, or person associated with such a municipal securities broker or municipal securities dealer may be compelled to submit to such arbitration except at his instance and in accordance with section 29 of this title.” 89 Stat. 133 , 15 U. S. C. § 78o-4(b)(2)(D); see also Brown, Shell, & Tyson, at 20.

Although I agree that the remark from the legislative history does not state expressly Congress’ approval of Wilko’s extension to Exchange Act claims, I do not believe that there are “difficulties,” as the Court suggests, in interpreting that remark to suggest such approval. See ante, at 237. Certainly, by the 1975 amendments dealing with exceptions to § 29(a) of the Exchange Act, Congress was enacting provisions directly related to the general subject of Wilko and its extension to Exchange Act claims —the scope of the nonwaiver provision — contrary to the Court’s flat statement that these provisions were not “remotely addressing that subject,” see ante, at 237. Moreover, understanding the remark to imply Congress’ affirmation of Wilko and an awareness of Wilko’s extension to § 10(b) claims is not incompatible with several of the concerns at the center of the Court’s “difficulties.” Thus, Congress’ concern that a possible misreading of § 28(b) might affect Wilko’s actual holding as to § 12(2) claims, see ante, at 237-238, is consistent with this understanding. In addition, the mention of “existing law” could very well have referred both to the Court’s decision in Scherk , where the Court assumed that Wilko could be applied to § 10(b) claims, see 417 U. S., at 515 , and to holdings by the lower courts. I disagree with the Court’s assertion that Congress left the Wilko issue to the courts by way of its statement that it did not change existing law. Ante, at 238. Common sense suggests that, when Congress states that it is not changing the law, while at the same time undertaking extensive amendments to a particular area of the law, one can assume that Congress is approving the law in existence. See Herman & MacLean v. Huddleston, 459 U. S. 375, 384-386 (1983).

See Raiford v. Buslease Inc., 745 F. 2d 1419, 1421 (CA11 1984); Surman v. Merrill Lynch, Pierce, Fenner & Smith, 733 F. 2d 59, 61 (CA8 1984) (dictum); Ingbar v. Drexel Burnham Lambert Inc., 683 F. 2d 603, 605 (CA1 1982) (same); De Lancie v. Birr, Wilson & Co., 648 F. 2d 1255, 1257-1259 (CA9 1981) (same); Mansbach v. Prescott, Ball & Turben, 598 F. 2d 1017, 1030 (CA6 1979); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Moore, 590 F. 2d 823, 827-829 (CA10 1978); Weissbuch v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 558 F. 2d 831, 833-836 (CA7 1977); Allegaert v. Perot, 548 F. 2d 432, 437-438 (CA2), cert. denied, 432 U. S. 910 (1977); Sibley v. Tandy Corp., 543 F. 2d 540, 543 , and n. 3 (CA5 1976), cert. denied, 434 U. S. 824 (1977); Ayres v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 538 F. 2d 532, 536-537 (CA3), cert. denied, 429 U. S. 1010 (1976).

Although in his concurrence, Justice White observed that the application of Wilko to § 10(b) claims was a “matter of substantial doubt,” Dean Witter Reynolds Inc. v. Byrd, 470 U. S., at 224 , and stated that “the contrary holdings of the lower courts must be viewed with some doubt,” id., at 225 , the only reasons offered for these assertions were those of the Scherk Court. The concurring opinion nowhere discussed the reasoning of the lower courts’ subsequent decisions, particularly their justification for the extension of Wilko because of the similar concern for the protection of investors that informed both the Securities Act and the Exchange Act. See, e. g., Weissbuch v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 558 F. 2d, at 835 .

In the wake of the Byrd decision, the “colorable argument” took on another life as courts followed the suggestion of the concurrence. See, e. g., Page v. Moseley, Hallgarten, Estabrook & Weeden, Inc., 806 F. 2d 291, 296-298 (CA1 1986); Phillips v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 795 F. 2d 1393, 1397-1398 (CA8 1986), cert. pending, No. 86-578; see also Duke Note 548, n. 7 (citing Federal District Court cases). It is somewhat curious that this “colorable argument” was taken up by many lower courts, often without any analysis on this point, even though the Court in Byrd specifically declined to address the issue, which was not before it. See 470 U. S., at 215, n. 1 .

Other courts reaffirmed their pre-Byrd holdings that § 10(b) claims were nonarbitrable. See Sterne v. Dean Witter Reynolds, Inc., 808 F. 2d 480, 483 (CA6 1987); Jacobson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 797 F. 2d 1197, 1202 (CA3 1986), cert. pending, No. 86-487; King v. Drexel Burnham Lambert, Inc., 796 F. 2d 59, 60 (CA5 1986), cert. pending, No. 86-282; 788 F. 2d 94 , 98 (CA2 1986) (case below). Two courts, which reexamined the issue, came to the same result on the basis of the similarities between the provisions of both Acts and the policies underlying them. See Conover v. Dean Witter Reynolds, Inc., 794 F. 2d, at 527 ; Wolfe v. E. F. Hutton & Co., 800 F. 2d 1032, 1036-1037 (CA11 1986) (en banc), cert. pending, No. 86-1218.

To a certain extent, the new popularity of the “colorable argument” was not unrelated to the belief that the judicial attitude toward arbitration had changed and that Wilko should be reconsidered because of this change. See Phillips v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 795 F. 2d, at 1395, 1398, n. 16 . One commentator observed: “The differences adduced by Justice White merely act as a wedge to hold the door open for this policy favoring arbitration.” Maryland Comment 356, n. 149.

In discussing the similar nonwaiver provision under the Exchange Act, § 29(a), 48 Stat. 903 , as amended, 15 U. S. C. § 78cc(a), the Court now suggests that it can be read only to mean that an investor cannot waive security-investment personnel’s “compliance” with a duty under the statute. See ante, at 228. The Court implies that the literal language of § 29(a) does not apply to an investor’s waiver of his own action. See ibid.; see also Brief for Petitioners 28-33; Fletcher, Privatizing Securities Disputes Through the Enforcement of Arbitration Agreements, 71 Minn. L. Rev. 393 , 422-423 (1987) (Fletcher). It appears, however, that in Wilko the Court understood the nonwaiver provision also to mean that, at least in the predispute context, an investor could not waive his compliance with the provision for dispute resolution in the courts. This reading of the anti-waiver provision makes sense in terms of the policy of investor protection. To counteract the inherent superior position of the securities-industry professional, up to and including the time when a dispute might occur between a broker and the investor, Congress intended to place the investor on “a different basis from other purchasers.” 346 U. S., at 435 . Construing § 14 not to allow the investor to waive his right to a judicial forum in the predispute setting serves this congressional purpose of maintaining the investor in a special position. As one recognized commentator has noted, in the securities Acts “Congress did not take away from the citizen ‘his inalienable right to make a fool of himself.’ It simply attempted to prevent others from making a fool of him.” L. Loss, Fundamentals of Securities Regulation 36 (1983), quoting in part 1935 Report of the (Canadian) Royal Commission on Price Spreads 38.

In Wilko , the Court did not discuss the situation where parties, after a dispute has arisen, enter into an agreement to arbitrate. 346 U. S., at 438 (Jackson, J., concurring). Courts have generally allowed enforcement of arbitration agreements in such circumstances despite the language of § 14, provided that the investor has made an informed waiver. See, e. g., Coenen v. R. W. Pressprich & Co., 453 F. 2d 1209, 1213 (CA2), cert. denied, 406 U. S. 949 (1972); Moran v. Paine, Webber, Jackson & Curtis, 389 *254 F. 2d 242, 245-246 (CA3 1968); see also Duke Note 558, and nn. 59, 60. This distinction makes sense when one considers that the Court’s reading of § 14 to bar an investor’s “waiver” of the judicial forum in the predispute setting emphasized the moment when this waiver occurred — “at a time when he is less able to judge the weight of the handicap the Securities Act places upon his adversary.” 346 U. S., at 435 . An investor would not be working under this disadvantage once a dispute has arisen. With the awareness —heightened by the reality of an actual dispute — of the possible benefits he would derive from proceeding in court and the possible burdens that his adversary would have to undergo, an investor might forgo the judicial forum for the quick resolution of the conflict in arbitration. He thus would remain master of the situation and in the special position Congress intended him to have.

The Scherk Court observed:

“Alberto-Culver is an American corporation with its principal place of business and the vast bulk of its activity in this country, while Scherk is a citizen of Germany whose companies were organized under the laws of Germany and Liechtenstein. The negotiations leading to the signing of the contract in Austria and to the closing in Switzerland took place in the United States, England, and Germany, and involved consultations with legal and trademark experts from each of those countries and from Liechtenstein. Finally, and most significantly, the subject matter of the contract concerned the sale of business enterprises organized under the laws of and primarily situated in European countries, whose activities were largely, if not entirely, directed to European markets.” 417 U. S., at 515 .

This reading of Scherk is entirely consistent with our explanation of that decision in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614 (1985), a case that also involved an agreement to arbitrate in the international business context. There, citing Scherk , we concluded that “concerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes require that we enforce the parties’ agreement, even assuming that a contrary result would be forthcoming in a domestic context.” 473 U. S., at 629 . In discussing that case at length, we expressed our agreement with the remark in Scherk that such arbitration agreements constituted “ ‘a *256 specialized kind of forum-selection clause.’” 473 U. S., at 630 , quoting Scherk, 417 U. S., at 519 .

Compare 15 U. S. C. § 78cc(a) (“Any condition, stipulation, or provision binding any person to waive compliance with any provision of this chapter or of any rule or regulation thereunder, or of any rule of an exchange required thereby shall be void”) with 15 U. S. C. § 77n (“Any condition, stipulation, or provision binding any person acquiring any security to waive compliance with any provision of this subchapter or of the rules and regulations of the Commission shall be void”).

Courts that initially rejected the “colorable argument” after Scherk and approved of the extension of Wilko to Exchange Act claims acknowledged the similarity between the policies of the two Acts. See, e. g., Weissbuch v. Merrill Lynch, Pierce, Fenner & Smith Inc., 558 F. 2d, at 835 . Courts that have rejected the “colorable argument” after Byrd have engaged in a similar analysis. See, e. g., Wolfe v. E. F. Hutton & Co., 800 F. 2d, at 1035 .

This argument, in essence, is a functional one. It suggests that, although Congress intended to protect investors through the provision of a judicial forum for the enforcement of their rights under the securities Acts, this intention will not be contravened by sending these claims to arbitration because arbitration is now the “functional equivalent” of the courts. See Brief for Securities and Exchange Commission as Amicus Curiae 12; see also Maryland Comment 373.

The Court does not mention specifically the improvements in arbitration as a reason for abandoning Wilko . This reason, however, is implied in the Court’s discussion of the Commission’s oversight of the SROs. See ante, at 233-234.

This Code has been used to harmonize the arbitration procedures among the SROs. See Katsoris, The Arbitration of a Public Securities Dispute, 53 Ford. L. Rev. 279, 283-284 (1984) (Katsoris). As the Commission explained: “[Tjhis [Code] marks a substantial improvement over the various arbitration procedures currently being utilized by the securities industry and represents an important step towards establishing a uniform system for resolving investor complaints through arbitration.” SEC Exchange Act Rel. No. 16390 (Nov. 30, 1979), 44 Fed. Reg. 70616 , 70617.

The rules of the Uniform Code provide for the selection of arbitrators and the manner in which the proceedings are conducted. See Fifth SICA Report; see also Code of Arbitration Procedure, CCH NASD Manual ¶¶ 3701-3744 (July 1986); Arbitration Rules 600-620, CCH American Stock Exchange Guide ¶¶ 9540-9551J (May 1986); Arbitration Rules 600-634, *259 CCH New York Stock Exchange Guide ¶¶2600-2634 (Mar.-1985). Some arbitration agreements permit arbitration before the American Arbitration Association, whose rules are similar to those in the above Codes. Brief for American Arbitration Association as Amicus Curiae 12-13, and App. B.; see also Fletcher 451.

Under the Uniform Code of Arbitration:

“Unless requested by the arbitrators or a party or parties to a dispute, no record of an arbitration proceeding shall be kept. If a record is kept, it shall be a verbatim record. If a party or parties to a dispute elect to have the record transcribed, the cost of such transcription shall be borne by the party or parties making the request.” Fifth SICA Report § 25, p. 36.

The Uniform Code of Arbitration and the SRO codes modeled upon it do provide for limited discovery, see Brief for Securities Industry Association, Inc., et al. as Amici Curiae 9, and the ability to subpoena witnesses, see Brief for American Arbitration Association as Amicus Curiae 13. Yet, by arbitrating their disputes, investors lose the wide choice of *260 venue and the extensive discovery provided by the courts. See Katsoris 287, n. 52.

The Uniform Code mandates that a majority of an arbitration panel, usually composed of between three to five arbitrators, be drawn from outside the industry. Fifth SICA Report §8(a), p. 31. Each arbitrator, moreover, is directed to disclose “any circumstances which might preclude such arbitrator from rendering an objective and impartial determination.” § 11, p. 32. In addition, the parties are informed of the business associations of the arbitrators, § 9, and each party has the right to one peremptory challenge and to unlimited challenges for cause, § 10, p. 32. The arbitrators are usually individuals familiar with the federal securities laws. See Brener v. Becker Paribas Inc., 628 F. Supp. 442, 448 (SDNY 1985).

Commentators have argued that more public participation in the SRO arbitration procedures is needed to give investors the impression that they are not in a forum biased in favor of the securities industry. See, e. g., Katsoris 313. The amici in support of petitioners and some commentators argue that the statistics concerning the results of arbitration show that the process is not weighted in favor of the securities industry. See Brief for Securities Industry Association, Inc., et al. as Amici Curiae 9; Brief for American Arbitration Association as Amicus Curiae 17; Fletcher 452. Such statistics, however, do not indicate the damages received by customers in relation to the damages to which they believed they were entitled. It is possible for an investor to “prevail” in arbitration while recovering a sum considerably less than the damages he actually incurred.

The Court accepts the argument, put forward now by the Commission, see Brief 18, n. 13, that its prior position was based solely on the Wilko decision and the decisions in the Courts of Appeals extending Wilko to § 10(b) claims, and not on its independent assessment of the adequacy of arbitration or its awareness of the possible abuses to which predispute agreements to arbitrate were subject. See ante, at 234, n. 3. Suffice it to say that the Commission’s opposition to predispute agreements that might mislead an investor into giving up statutory rights even predates Wilko . In a release discussing proposed Rule 15c2-2, which prohibited the use of clauses purporting to bind investors to arbitrate future disputes, the Commission observed that, at least since 1961, it had opposed provisions in agreements whose result or purpose was to have investors give up rights or remedies under the securities Acts. See Disclosure Regarding Recourse to the Federal Courts Notwithstanding Arbitration Clauses in Broker-Dealer Customer Agreements, SEC Exchange Act Rel. No. 19813 (May 26, 1983), [1982-1983 Transfer Binder] CCH Fed. Sec. L. Rep. ¶ 83,356 , p. 85,967, n. 6.

The Commission, in a release issued in 1979, explained its opposition to predispute arbitration agreements:

“It is the Commission’s view that it is misleading to customers to require execution of any customer agreement which does not provide adequate disclosure about the meaning and effect of its terms, particularly any provision which might lead a customer to believe that he or she has waived prospectively rights under the federal securities laws, rules thereunder, or certain rules of any self-regulatory organization. Customers should be made aware prior to signing an agreement containing an arbitration clause that such a prior agreement does not bar a cause of action arising under the federal securities laws. If a broker-dealer customer’s agreement contains an arbitration clause, it must be consistent with current judicial decisions regarding the application of the federal securities laws to predispute arbitration agreements.

“The Commission is especially concerned that arbitration clauses continue to be part of form agreements widely used by broker-dealers, despite the number of cases in which these clauses have been held to be unenforceable in whole or in part. Requiring the signing of an arbitration agreement without adequate disclosure as to its meaning and effect violates standards of fair dealing with customers and constitutes conduct that is inconsistent with just and equitable principles of trade. In addition, it may raise serious questions of compliance with the anti-fraud provisions of the federal securities laws.” Broker-Dealers Concerning Clauses in Customer Agreements Which Provide for Arbitration of Future Disputes, SEC Exchange Act Rel. No. 15984 (July 2, 1979), 44 Fed. Reg. 40462 , 40464 (footnotes omitted).

As the quoted material suggests, the Commission was aware of the court cases concerning such arbitration agreements. In the release, the Commission discussed at length this Court’s Wilko decision and cases in which courts had extended it to § 10(b) claims. See 44 Fed. Reg., at 40463. The thrust of the release is that the Commission not only accepted the ease law but also, for its own reasons, thought that the arbitration agreements in the predispute context were inappropriate and misleading. See, e. g., Implementation of an Investor Dispute Resolution System, SEC Exchange Act Rel. No. 13470 (Apr. 26,1977), [1977-1978 Transfer Binder] CCH Fed. See. L. Rep. ¶ 81,136, p. 87,907 (“Customer agreements to arbitrate, at the instance of a firm, in margin agreements or elsewhere, should be pro *264 hibited”). The Commission acknowledges that in 1975 it even filed an amicus brief in Ayres v. Merrill lynch, Pierce, Fenner & Smith, Inc., 538 F. 2d 532 (CA3), cert. denied, 429 U. S. 1010 (1976), in which it supported the extension of Wilko to § 10(b) claims. See Brief 18, n. 13.

The Commission rejected commentators’ suggestions that the refusal to compel arbitration of securities disputes on the basis of the predispute agreements ‘“rests on questionable legal ground.’” See Recourse to the Courts Notwithstanding Arbitration Clauses in Broker-Dealer Customer Agreements, SEC Exchange Act Rel. No. 20397 (Nov. 18, 1983), [1983-1984 Transfer Binder] CCH Fed. Sec. L. Rep. ¶ 83,452 , p. 86,357, n. 6, quoting comments of the Securities Industry Association.

This rule provides in pertinent part:

“It shall be a fraudulent, manipulative or deceptive act or practice for a broker or dealer to enter into an agreement with any public customer which purports to bind the customer to the arbitration of future disputes between them arising under the Federal securities laws, or to have in effect such an agreement, pursuant to which it effects transactions with or for a customer.” Rule 15c2-2, 17 CFR §240 .15c2-2(a) (1986).

Even those who would agree with the Commission that its general oversight of SRO arbitration procedures has bettered the adequacy of arbitration recognize that improvements in this oversight still are needed. For example, commentators have suggested that the Commission should revise the Uniform Code of Arbitration in order to ensure that predispute arbitration agreements are displayed prominently, that the reference to a person drawn from “outside the securities industry” be more specifically defined, and that arbitrators be required to give a more detailed statement of their reasoning. See Brown, Shell, & Tyson 34-36. Congress could give to the Commission specific rulemaking authority in the area of arbitration with the goal of preventing abuses in the process that have surfaced in recent years. Id., at 34 .