Wall Street's Private Judicial System Exposed as a Fraud
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For the past 18 years, a motley mix of corporate law firms, Wall Street powerhouses and private justice providers have been serving up false testimony to the highest court of our land that mandatory arbitration is "inexpensive, fast and fair" and a proper substitute for the public court system. And for 18 years a majority of the U.S. Supreme Court has been cozying up to these brazenly preposterous statements while gutting our Constitution's Seventh Amendment guarantee to a jury trial. In doing so, wittingly or unwittingly, the Supreme Court had aided and abetted the key linchpin of a wealth transfer system that has brought the nation to its knees.
Today, everything from Wall Street brokerage accounts, employment contracts, credit cards, mortgages, even cell phone contracts have routinely removed the individual's constitutional right to file a claim in court to seek redress of a grievance or fraudulent action. Instead, the individual's claim is forced into one of the privately run arbitration organizations where conflicts are rampant, discovery is limited, and the right to appeal is typically impossible because the arbitrators are not required to explain the rationale for their decisions in writing.
In a saner era, these mandatory arbitration contracts would be thrown out by courts as contracts of adhesion because they were offered on a take it or leave it basis. Under any rational interpretation of contract law, contracts must be a meeting of the minds, freely entered into, between parties of equal bargaining power.
But just as profits have been privatized on Wall Street and losses socialized, the right to a jury trial in a court system paid for by individual taxpayers is now increasingly reserved for corporations, not people. It's a form of judicial apartheid not dissimilar to the way the Supreme Court rationalized the segregation of blacks in its Plessy v. Ferguson decision in 1896, promising "equal" facilities, just separate.
Last week, a lone female state attorney general put the lie to mandatory arbitration. And when she pulled back its dark curtain, what we saw was a grand theft of both justice and wealth perpetuated by the U.S. Supreme Court against the American people.
Lori Swanson, Attorney General of Minnesota, charged the National Arbitration Forum with consumer fraud, deceptive trade practices and false advertising. The National Arbitration Forum is a private justice provider that adjudicates upwards of 200,000 consumer claims a year and acknowledges that it has been appointed as the arbitrator in "hundreds of millions of contracts."
Swanson's lawsuit charges that the National Arbitration Forum, which masquerades as functioning like an independent judge and jury, is in fact financially shackled to debt collection law firms representing major credit card companies. The lawsuit states that:
"Beginning in 2006 and through 2007, Accretive LLCengineered two transactions. In the first transaction, Accretive formed several private equity funds under the name 'Agora' (meaning 'Forum' in Greek), which in turn invested $42 million in the National Arbitration Forum and obtained governance rights in it. In the second transaction, three of the country's largest debt collection law firms (Mann Bracken of Georgia, Wolpoff & Abramson of the District of Columbia, and Eskanos & Adler of California) merged into one large national law firm called Mann Bracken, LLP. Accretive then formed and funded (partly using federal money from the U.S. Small Business Administration) a debt collection agency called Axiant, LLC, which acquired the assets and collections operations of Mann Bracken. Through these transactions, the Accretive hedge fund group simultaneously took control of one of the country's largest debt collectors and became affiliated with the Forum, the country's largest debt collection arbitration company."