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Article Title

The Level Playing Field

Abstract

The years 1987-1989 (hereinafter the "Dickens years" or "Dickens period") have been extremely volatile for the securities industry. Regardless of the causes, this volatility has become a fact of life resulting in enormous profits for some and enormous losses for others. One outgrowth of these losses is the explosion of litigation between the individual investors and the securities industry. Not only has the amount of litigation mushroomed, but the disputes have become significantly more complex. During the Dickens years, the forum for the resolution of these disputes has shifted from the courtroom to arbitration. This dramatic switch is largely the result of the United States Supreme Court opinions in Shearson/American Express Inc. v. McMahon and Rodriguez de Quijas v. Shearson/American Express Inc., which basically held that cases arising under the federal securities laws were arbitrable. Arbitration provides the advantage of speedy dispute resolution by persons knowledgeable in the area, without excessive costs. Unless arbitration procedures are fair in fact and appearance, however, their present popularity as a means of resolving securities disputes will greatly diminish. In this regard, the public perception of fairness must be zealously guarded, for it extends far beyond the issue of arbitration. Indeed, it goes to the very heart of the public investors' trust in the securities markets themselves, and it is this trust which must be preserved for those very markets to remain healthy.

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