Companies can now hide mandatory arbitration clauses from investors without slowing down stock sales

The US Securities and Exchange Commission will no longer delay a company's stock offering if it includes a mandatory arbitration clause for investor disputes. This means companies can force investors into private arbitration, rather than court, without facing a regulatory slowdown when they want to sell shares.

Companies often prefer private arbitration because it is confidential, usually faster, and often favors the company. This change removes a small but real disincentive for companies to include these clauses in their investor agreements. It makes it easier for companies to avoid public lawsuits from investors.