Shareholder Advocacy - Pomerantz LLP

Pomerantz holds an unwavering commitment to protecting the rights of shareholders.

Pomerantz’s dedication to this mission extends beyond the courtroom. The Firm regularly conducts outreach to regulatory agencies, including the U.S. Securities & Exchange Commission, members of Congress, and the executive branch, to advocate on specific issues that significantly impact shareholder rights.

Ongoing developments underscore why this work remains as urgent as ever. On September 17, 2025, the Securities and Exchange Commission issued a policy statement that struck at the heart of investor protections. Specifically, the SEC jettisoned a policy that had previously prohibited the use of mandatory arbitration provisions in the governing documents for companies that are going public through an IPO. Mandatory arbitration clauses seriously curtail shareholder rights because they require claims to be brought in arbitration, rather than in court, and typically bar the use of class actions. Prior to its abrupt shift, the SEC had said that such provisions are inconsistent with “the public interest and protection of investors.”

Mandatory arbitration provisions are extremely harmful to shareholder rights for several reasons, as Senators Elizabeth Warren and Jack Reed wrote in a September 16, 2025 letter to SEC Chairman Paul Atkins, urging the SEC not to adopt this policy change. Commissioner Caroline Crenshaw, the lone Democratic commissioner on the SEC and the only one to oppose this policy change, raised similar concerns when dissenting from its approval of the policy statement.

It remains to be seen whether companies will actually adopt such unpopular provisions and, if so, whether they are legally valid. Pomerantz has been, and will continue to be, at the forefront of fighting for the vital right of investor access to courts through securities class actions. Most recently, Pomerantz was deeply involved in drafting and organizing institutional investor support among many of the Firm’s clients for a joint letter to the SEC opposing the agency’s abrupt reversal of its longstanding mandatory arbitration policy. The letter sent to SEC Chairman Paul Atkins on November 3, 2025, garnered support from over 60 major institutional investors and pension funds, and was referenced by Bloomberg, among other publications.

This is Pomerantz’s latest step in its longstanding effort to oppose mandatory shareholder arbitration provisions. In 2018, for instance, then-Chairman Jay Clayton stated in a letter to Congress that the Division of Corporation Finance would maintain its stance against mandatory arbitration. Later that year, when the SEC indicated its continuing interest about the issue, Pomerantz organized a coalition of leading institutional investors from around the world to meet with Chairman Clayton and later, with a bipartisan group of Senate staffers. These meetings led to a letter, signed by numerous State Treasurers and the State Financial Officers Foundation, urging the SEC to maintain its stance against forced arbitration.

Also in 2018, when an activist shareholder sought to have Johnson & Johnson add an arbitration provision to the company’s bylaws, Pomerantz represented the Colorado Public Employees’ Retirement Association as an intervenor in litigation that ensued for several years, seeking to ensure that investors’ rights were protected.