ANALYSIS: SpaceX—Breaking Records, Rewriting the Rules

SpaceX, a company with Mars-size ambitions, is rewriting the rules with the largest IPO ever.

Beyond sheer size, its registration statement includes an unprecedented mandatory arbitration clause that could impact shareholders significantly because it negates their ability to file class actions against a company for false or misleading statements in their offering documents.

Shareholder Claims Will Go to Arbitration

Shareholders have long been able to join a class and sue issuers in federal court for fraud and material misstatements or omissions under the Securities Act of 1933 and Securities Exchange Act of 1934.

Several factors may have led ...