New York Pension Funds Urge SEC to Undo Curbs on Investor Suits

New York pension plans and other big investors have called on the SEC to reverse a new policy that lets companies push shareholders’ fraud claims into arbitration instead of litigation.

The Securities and Exchange Commission in September limited shareholders’ longstanding court access for a “costly, unproven, and unwieldy system of private arbitration,” New York city and state pension plans said in a Nov. 3 letter to SEC Chairman Paul Atkins. Chicago Teachers’ Pension Fund, Denver Employees Retirement Plan, and dozens of other institutional investors joined them in the letter.

The SEC’s action permits companies to insert clauses in ...