Carlyle Group, the Washington (D.C.) buyout firm that's preparing to go public this year, wants to bar future shareholders from filing individual and class actions. The firm revised its offering documents on Jan. 10 to say that investors who purchase company shares must settle any subsequent claims against Carlyle through arbitration in Wilmington, Del. That could limit the ability of stockholders to win big awards for securities law violations such as fraud, several attorneys say. The Supreme Court has issued a series of rulings in recent years upholding the right of companies to require the use of arbitration to resolve disputes with consumers. Carlyle is seeking to extend this concept to public shareholders, a move that could run up against a bedrock principle of U.S. securities lawthe ability of investors to seek redress in federal court. "What we are talking about is legally uncharted territory," says Donald C. Langevoort, a law professor at Georgetown University in Washington who previously worked for the Securities and Exchange Commission.
展开▼
