Wilko v. Swan,
346 U.S. 427 (1953)

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U.S. Supreme Court

Wilko v. Swan, 346 U.S. 427 (1953)

Wilko v. Swan

No. 39

Argued October 21, 1953

Decided December 7, 1953

346 U.S. 427


In an action brought by a customer against a securities brokerage firm to recover damages, under the civil liabilities provisions of § 12(2) of the Securities Act of 1933, for alleged misrepresentation in the sale of securities, held that an agreement for arbitration of any controversy arising in the future between the parties was void under § 14, notwithstanding the provisions of the United States Arbitration Act. Pp. 346 U. S. 428-438.

(a) The agreement to arbitrate future controversies was void under § 14 of the Securities Act as a "stipulation" binding the customer to "waive compliance" with a "provision" of the Act. Pp. 346 U. S. 432-435.

(b) The right of an aggrieved person under § 22(a) to select the judicial forum is a "provision" of the Securities Act that cannot be waived under § 14 thereof. Pp. 346 U. S. 434-438.

(c) As the protective provisions of the Securities Act require the exercise of judicial direction to fairly assure their effectiveness, Congress must have intended § 14 to apply to waiver of judicial trial and review. P. 346 U. S. 437.

201 F.2d 439, reversed.

Petitioner sued respondents to recover damages under the Securities Act of 1933. Respondents' motion to stay the action, pursuant to § 3 of the United States Arbitration Act, was denied by the District Court. 107 F.Supp. 75. The Court of Appeals reversed. 201 F.2d 439. This Court granted certiorari. 345 U.S. 969. Reversed, p. 346 U. S. 438.

Page 346 U. S. 428

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