Carlyle Backs Down On Lawsuit Ban

Feb 3 2012 | 1:31pm ET

The Carlyle Group has abandoned its attempt to ban shareholders from filing class-action lawsuits.

The Washington, D.C.-based private equity giant had hoped to force all shareholders to settle claims against it at arbitration. The clause was inserted in the firm’s IPO documents and looked set to delay a much-anticipated stock sale.
 
“After consultations with the SEC, Carlyle investors and other interested parties, we have decided to withdraw the proposed arbitration provision,” Christopher Ullman, a Carlyle spokesman, told Bloomberg in an e-mailed statement. “We first offered the provision because we believed that arbitrating claims would be more efficient, cost effective and beneficial to our unitholders.”
 
Gary M. Paul, president of the American Association for Justice, issued a statement in response to Carlyle’s decision, saying:
 
“With the investor community, lawmakers, and former SEC officials speaking out against the use of forced arbitration in Carlyle’s proposed IPO, it was evident that this was an ill-conceived move from the start.  Corporations intent on skirting accountability have used forced arbitration as a weapon to hide wrongdoing and deny legal recourse to countless workers and consumers. Today’s developments should send a strong signal to other companies that forced arbitration clauses will not be accepted by investors or the SEC.”
 
 


In Depth

Creating An Offshore Hedge Fund Dream Team: The Seven Key Players

Jun 26 2015 | 6:47am ET

If you want to set up an offshore hedge fund, like any great team, you’re only...

Lifestyle

Hedgies Set to Compete in Wall Street Decathlon

Jun 8 2015 | 12:37am ET

The Wall Street Decathlon — a 10-event physical challenge that will crown “Wall...

Guest Contributor

6 Essential Principles To Balance Your Investment Risk

Jun 26 2015 | 10:07am ET

In this article, financial expert Greg Silberman explores how to hedge a private...

 

Editor's Note