Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Senators Ask SEC to Reject Carlyle Push to Ban Shareholder Suits

Don't Miss Out —
Follow us on:

Feb. 3 (Bloomberg) -- The U.S. Securities and Exchange Commission should deny Carlyle Group LP’s attempt to block future shareholders from taking the company to court, three Democratic senators said in a letter to SEC Chairman Mary Schapiro.

Carlyle’s provision “would unlawfully deprive investors of their ability to vindicate their statutory rights,” Sens. Al Franken of Minnesota, Robert Menendez of New Jersey and Richard Blumenthal of Connecticut wrote in the letter dated today, aiming to influence the agency as it considers the Carlyle public-offering filing that could set a precedent for future IPOs. The letter said the SEC should “maintain its longstanding policy of opposing the inclusion of provisions requiring mandatory arbitration of shareholder disputes.”

The Washington-based buyout firm amended a regulatory filing last month to require future shareholders to resolve claims against it through arbitration. The SEC, which blocked an initial public offering with a similar arbitration clause in the late 1980s, is deciding whether to allow Carlyle’s offering to proceed. Doing so would ban investors in Carlyle and any future company that follows in its path from taking disputes to court.

Christopher Ullman, a spokesman for Carlyle, declined comment on the letter.

“Carlyle’s blatant attempt to skirt accountability runs counter to the SEC’s mission of protecting and advocating for the rights of investors,” said Gary M. Paul, president of trial-lawyer group the American Association for Justice, in a statement yesterday.

To contact the reporter on this story: Jesse Hamilton in Washington at jhamilton33@bloomberg.net

To contact the editor responsible for this story: Maura Reynolds at mreynolds34@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.