Case Name: SHEARSON/AMERICAN EXPRESS INC. et al. v. McMAHON et al.
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1987-06-08
Citations: 482 U.S. 220
Docket Number: No. 86-44
Parties: SHEARSON/AMERICAN EXPRESS INC. et al. v. McMAHON et al.
Judges: O’ConnoR, J., delivered the opinion of the Court, in which Rehnquist, C. J., and White, Powell, and Scalia, JJ., joined, and in Parts I, II, and IV of which Brennan, Marshall, Blackmun, and Stevens, JJ., joined. Blackmun, J., filed an opinion concurring in part and dissenting in part, in which Brennan and Marshall, JJ., joined, post, p. 242. Stevens, J., filed an opinion concurring in part and dissenting in part, post, p. 268.
Reporter: United States Reports
Volume: 482
Pages: 220–269

Head Matter:
SHEARSON/AMERICAN EXPRESS INC. et al. v. McMAHON et al.
No. 86-44.
Argued March 3, 1987
Decided June 8, 1987
O’ConnoR, J., delivered the opinion of the Court, in which Rehnquist, C. J., and White, Powell, and Scalia, JJ., joined, and in Parts I, II, and IV of which Brennan, Marshall, Blackmun, and Stevens, JJ., joined. Blackmun, J., filed an opinion concurring in part and dissenting in part, in which Brennan and Marshall, JJ., joined, post, p. 242. Stevens, J., filed an opinion concurring in part and dissenting in part, post, p. 268.
Theodore A. Krebsbach argued the cause and filed briefs for petitioners.
Richard G. Taranto argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Fried, Deputy Solicitor General Cohen, Daniel L. Goelzer, Paul Gonson, Jacob H. Stillman, and David A. Sirignano.
Theodore G. Eppenstein argued the cause for respondents. With him on the brief was Madelaine Eppenstein.
Briefs of amici curiae urging reversal were filed for the American Arbitration Association by Michael F. Hoeliering, Joseph T. McLaughlin, Rosemary S. Page, Thomas Thacker, Gerald Aksen, Sheldon L. Berens, Richard S. Lombard, Robert MacCrate, John R. Stevenson, and Robert B. von Mehren; and for the Attorneys for Securities Industry Association, Inc., et al. by Joseph G. Riemer III, Judith Welcom, Paul Windels III, William J. Fitzpatrick, Donald B. McNelley, Steven N. Machtinger, Paul J. Dubow, and Joseph McLaughlin.
Briefs of amici curiae urging affirmance were filed for Willie D. Chandler et al. by Stirling Lathrop and Richard D. Greenfield; and for Bruce Cordray et al. by Denis A. Downey.

Opinion:
Justice O'Connor
delivered the opinion of the Court.
This case presents two questions regarding the enforceability of predispute arbitration agreements between brokerage firms and their customers. The first is whether a claim brought under § 10(b) of the Securities Exchange Act of 1934 (Exchange Act), 48 Stat. 891, 15 U. S. C. §78j(b), must be sent to arbitration in accordance with the terms of an arbitration agreement. The second is whether a claim brought under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. § 1961 et seq., must be arbitrated in accordance with the terms of such an agreement.
f — i
Between 1980 and 1982, respondents Eugene and Julia McMahon, individually and as trustees for various pension and profit-sharing plans, were customers of petitioner Shear- son/American Express Inc. (Shearson), a brokerage firm registered with the Securities and Exchange Commission (SEC or Commission). Two customer agreements signed by Julia McMahon provided for arbitration of any controversy relating to the accounts the McMahons maintained with Shearson. The arbitration provision provided in relevant part as follows:
"Unless unenforceable due to federal or state law, any controversy arising out of or relating to my accounts, to transactions with you for me or to this agreement or the breach thereof, shall be settled by arbitration in accordance with the rules, then in effect, of the National Association of Securities Dealers, Inc. or the Boards of Directors of the New York Stock Exchange, Inc. and/or the American Stock Exchange, Inc. as I may elect." 618 F. Supp. 384, 385 (1985).
In October 1984, the McMahons filed an amended complaint against Shearson and petitioner Mary Ann McNulty, the registered representative who handled their accounts, in the United States District Court for the Southern District of New York. The complaint alleged that McNulty, with Shearson's knowledge, had violated § 10(b) of the Exchange Act and Rule 10b-5, 17 CFR §240.10b-5 (1986), by engaging in fraudulent, excessive trading on respondents' accounts and by making false statements and omitting material facts from the advice given to respondents. The complaint also alleged a RICO claim, 18 U. S. C. § 1962(c), and state law claims for fraud and breach of fiduciary duties.
Relying on the customer agreements, petitioners moved to compel arbitration of the McMahons' claims pursuant to § 3 of the Federal Arbitration Act, 9 U. S. C. §3. The District Court granted the motion in part. 618 F. Supp. 384 (1985). The court first rejected the McMahons' contention that the arbitration agreements were unenforceable as contracts of adhesion. It then found that the McMahons' § 10(b) claims were arbitrable under the terms of the agreement, concluding that such a result followed from this Court's decision in Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213 (1985), and the "strong national policy favoring the enforcement of arbitration agreements." 618 F. Supp., at 388. The District Court also held that the McMahons' state law claims were ar-bitrable under Dean Witter Reynolds Inc. v. Byrd, supra. It concluded, however, that the McMahons' RICO claim was not arbitrable "because of the important federal policies inherent in the enforcement of RICO by the federal courts." 618 F. Supp., at 387.
The Court of Appeals affirmed the District Court on the state law and RICO claims, but it reversed on the Exchange Act claims. 788 F. 2d 94 (1986). With respect to the RICO claim, the Court of Appeals concluded that "public policy" considerations made it "inappropriat[e]" to apply the provisions of the Arbitration Act to RICO suits. Id., at 98. The court reasoned that RICO claims are "not merely a private matter." Ibid. Because a RICO plaintiff may be likened to a "private attorney general" protecting the public interest, ibid., the Court of Appeals concluded that such claims should be adjudicated only in a judicial forum. It distinguished this Court's reasoning in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614 (1985), concerning the arbitrability of antitrust claims, on the ground that it involved international business transactions and did not affect the law "as applied to agreements to arbitrate arising from domestic transactions." 788 F. 2d, at 98.
With respect to respondents' Exchange Act claims, the Court of Appeals noted that under Wilko v. Swan, 346 U. S. 427 (1953), claims arising under § 12(2) of the Securities Act of 1933 (Securities Act), 48 Stat. 84, 15 U. S. C. § 77((2), are not subject to compulsory arbitration. The Court of Appeals observed that it previously had extended the Wilko rule to claims arising under § 10(b) of the Exchange Act and Rule 10b-5. See, e. g., Allegaert v. Perot, 548 F. 2d 432 (CA2), cert. denied, 432 U. S. 910 (1977); Greater Continental Corp. v. Schechter, 422 F. 2d 1100 (CA2 1970). The court acknowledged that Scherk v. Alberto-Culver Co., 417 U. S. 506 (1974), and Dean Witter Reynolds Inc. v. Byrd, supra, had "cast some doubt on the applicability of Wilko to claims under § 10(b)." 788 F. 2d, at 97. The Court of Appeals nevertheless concluded that it was bound by the "clear judicial precedent in this Circuit," and held that Wilko must be applied to Exchange Act claims. 788 F. 2d, at 98.
We granted certiorari, 479 U. S. 812 (1986), to resolve the conflict among the Courts of Appeals regarding the arbitra-bility of § 10(b) and RICO claims.
HH HH
The Federal Arbitration Act, 9 U. S. C. §1 et seq., provides the starting point for answering the questions raised in this case. The Act was intended to "revers[e] centuries of judicial hostility to arbitration agreements," Scherk v. Alberto-Culver Co., supra, at 510, by "placing] arbitration agreements 'upon the same footing as other contracts.' " 417 U. S., at 511, quoting H. R. Rep. No. 96, 68th Cong., 1st Sess., 1, 2 (1924). The Arbitration Act accomplishes this purpose by providing that arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U. S. C. §2. The Act also provides that a court must stay its proceedings if it is satisfied that an issue before it is arbitrable under the agreement, § 3; and it authorizes a federal district court to issue an order compelling arbitration if there has been a "failure, neglect, or refusal" to comply with the arbitration agreement, § 4.
The Arbitration Act thus establishes a "federal policy favoring arbitration," Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U. S. 1, 24 (1983), requiring that "we rigorously enforce agreements to arbitrate." Dean Witter Reynolds Inc. v. Byrd, supra, at 221. This duty to enforce arbitration agreements is not diminished when a party bound by an agreement raises a claim founded on statutory rights. As we observed in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., "we are well past the time when judicial suspicion of the desirability of arbitration and of the competence of arbitral tribunals" should inhibit enforcement of the Act "'in controversies based on statutes.'" 473 U. S., at 626-627, quoting Wilko v. Swan, supra, at 432. Absent a well-founded claim that an arbitration agreement resulted from the sort of fraud or excessive economic power that "would provide grounds 'for the revocation of any contract,'" 473 U. S., at 627, the Arbitration Act "provides no basis for disfavoring agreements to arbitrate statutory claims by skewing the otherwise hospitable inquiry into arbitra-bility." Ibid.
The Arbitration Act, standing alone, therefore mandates enforcement of agreements to arbitrate statutory claims. Like any statutory directive, the Arbitration Act's mandate may be overridden by a contrary congressional command. The burden is on the party opposing arbitration, however, to show that Congress intended to preclude a waiver of judicial remedies for the statutory rights at issue. See id., at 628. If Congress did intend to limit or prohibit waiver of a judicial forum for a particular claim, such an intent "will be deducible from [the statute's] text or legislative history," ibid., or from an inherent conflict between arbitration and the statute's underlying purposes. See id., at 632-637; Dean Witter Reynolds Inc. v. Byrd, 470 U. S., at 217.
To defeat application of the Arbitration Act in this case, therefore, the McMahons must demonstrate that Congress intended to make an exception to the Arbitration Act for claims arising under RICO and the Exchange Act, an intention discernible from the text, history, or purposes of the statute. We examine the McMahons' arguments regarding the Exchange Act and RICO in turn.
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When Congress enacted the Exchange Act in 1934, it did not specifically address the question of the arbitrability of § 10(b) claims. The McMahons contend, however, that congressional intent to require a judicial forum for the resolution of § 10(b) claims can be deduced from § 29(a) of the Exchange Act, 15 U. S. C. § 78cc(a), which declares void "[a]ny condition, stipulation, or provision binding any person to waive compliance with any provision of [the Act]."
First, we reject the McMahons' argument that § 29(a) forbids waiver of § 27 of the Exchange Act, 15 U. S. C. § 78aa. Section 27 provides in relevant part:
"The district courts of the United States . . . shall have exclusive jurisdiction of violations of this title or the rules and regulations thereunder, and of all suits in equity and actions at law brought to enforce any liability or duty created by this title or the rules and regulations thereunder."
The McMahons contend that an agreement to waive this jurisdictional provision is unenforceable because § 29(a) voids the waiver of "any provision" of the Exchange Act. The language of § 29(a), however, does not reach so far. What the antiwaiver provision of § 29(a) forbids is enforcement of agreements to waive "compliance" with the provisions of the statute. But § 27 itself does not impose any duty with which persons trading in securities must "comply." By its terms, § 29(a) only prohibits waiver of the substantive obligations imposed by the Exchange Act. Because § 27 does not impose any statutory duties, its waiver does not constitute a waiver of "compliance with any provision" of the Exchange Act under § 29(a).
We do not read Wilko v. Swan, 346 U. S. 427 (1953), as compelling a different result. In Wilko, the Court held that a predispute agreement could not be enforced to compel arbitration of a claim arising under § 12(2) of the Securities Act, 15 U. S. C. § 772(2). The basis for the ruling was § 14 of the Securities Act, which, like § 29(a) of the Exchange Act, declares void any stipulation "to waive compliance with any provision" of the statute. At the beginning of its analysis, the Wilko Court stated that the Securities Act's jurisdictional provision was "the kind of 'provision' that cannot be waived under § 14 of the Securities Act." 346 U. S., at 435. This statement, however, can only be understood in the context of the Court's ensuing discussion explaining why arbitration was inadequate as a means of enforcing "the provisions of the Securities Act, advantageous to the buyer." Ibid. The conclusion in Wilko was expressly based on the Court's belief that a judicial forum was needed to protect the substantive rights created by the Securities Act: "As the protective provisions of the Securities Act require the exercise of judicial direction to fairly assure their effectiveness, it seems to us that Congress must have intended § 14 . . .to apply to waiver of judicial trial and review." Id., at 437. Wilko must be understood, therefore, as holding that the plaintiff's waiver of the "right to select the judicial forum," id., at 435, was unenforceable only because arbitration was judged inadequate to enforce the statutory rights created by § 12(2).
Indeed, any different reading of Wilko would be inconsistent with this Court's decision in Scherk v. Alberto-Culver Co., 417 U. S. 506 (1974). In Scherk, the Court upheld enforcement of a predispute agreement to arbitrate Exchange Act claims by parties to an international contract. The Scherk Court assumed for purposes of its opinion that Wilko applied to the Exchange Act, but it determined that an international contract "involve[d] considerations and policies significantly different from those found controlling in Wilko." 417 U. S., at 515. The Court reasoned that arbitration reduced the uncertainty of international contracts and obviated the danger that a dispute might be submitted to a hostile or unfamiliar forum. At the same time, the Court noted that the advantages of judicial resolution were diminished by the possibility that the opposing party would make "speedy resort to a foreign court." Id., at 518. The decision in Scherk thus turned on the Court's judgment that under the circumstances of that case, arbitration was an adequate substitute for adjudication as a means of enforcing the parties' statutory rights. Scherk supports our understanding that Wilko must be read as barring waiver of a judicial forum only where arbitration is inadequate to protect the substantive rights at issue. At the same time, it confirms that where arbitration does provide an adequate means of enforcing the provisions of the Exchange Act, § 29(a) does not void a pre-dispute waiver of § 27 — Scherk upheld enforcement of just such a waiver.
The second argument offered by the McMahons is that the arbitration agreement effects an impermissible waiver of the substantive protections of the Exchange Act. Ordinarily, "[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum." Mitsubishi Motors Corp. v. Soler-Chrysler-Plymouth, Inc., 473 U. S., at 628. The McMahons argue, however, that § 29(a) compels a different conclusion. Initially, they contend that predispute agreements are void under § 29(a) because they tend to result from broker overreaching. They reason, as do some commentators, that Wilko is premised on the belief "that arbitration clauses in securities sales agreements generally are not freely negotiated." See, e. g., Sterk, Enforceability of Agreements to Arbitrate: An Examination of the Public Policy Defense, 2 Cardozo L. Rev. 481, 519 (1981). According to this view, Wilko barred enforcement of predispute agreements because of this frequent inequality of bargaining power, reasoning that Congress intended for § 14 generally to ensure that sellers did not "maneuver buyers into a position that might weaken their ability to recover under the Securities Act." 346 U. S., at 432. The McMahons urge that we should interpret § 29(a) in the same fashion.
We decline to give Wilko a reading so far at odds with the plain language of § 14, or to adopt such an unlikely interpretation of § 29(a). The concern that § 29(a) is directed against is evident from the statute's plain language: it is a concern with whether an agreement "waive[s] compliance with [a] provision" of the Exchange Act. The voluntariness of the agreement is irrelevant to this inquiry: if a stipulation waives compliance with a statutory duty, it is void under § 29(a), whether voluntary or not. Thus, a customer cannot negotiate a reduction in commissions in exchange for a waiver of compliance with the requirements of the Exchange Act, even if the customer knowingly and voluntarily agreed to the bargain. Section 29(a) is concerned, not with whether brokers "maneuvered customers] into" an agreement, but with whether the agreement "weaken[s] their ability to recover under the [Exchange] Act." 346 U. S., at 432. The former is grounds for revoking the contract under ordinary principles of contract law; the latter is grounds for voiding the agreement under § 29(a).
The other reason advanced by the McMahons for finding a waiver of their § 10(b) rights is that arbitration does "weaken their ability to recover under the [Exchange] Act." Ibid. That is the heart of the Court's decision in Wilko, and respondents urge that we should follow its reasoning. Wilko listed several grounds why, in the Court's view, the "effectiveness [of the Act's provisions] in application is lessened in arbitration." 346 U. S., at 435. First, the Wilko Court believed that arbitration proceedings were not suited to cases requiring "subjective findings on the purpose and knowledge of an alleged violator." Id., at 435-436. Wilko also was concerned that arbitrators must make legal determinations "without judicial instruction on the law," and that an arbitration award "may be made without explanation of [the arbitrator's] reasons and without a complete record of their proceedings." Id., at 436. Finally, Wilko noted that the "[p]ower to vacate an award is limited," and that "interpretations of the law by the arbitrators in contrast to manifest disregard are not subject, in the federal courts, to judicial review for error in interpretation." Id., at 436-437. Wilko concluded that in view of these drawbacks to arbitration, §12(2) claims "require[d] the exercise of judicial direction to fairly assure their effectiveness." Id., at 437.
As Justice Frankfurter noted in his dissent in Wilko, the Court's opinion did not rest on any evidence, either "in the record . . . [or] in the facts of which [it could] take judicial notice," that "the arbitral system . . . would not afford the plaintiff the rights to which he is entitled." Id., at 439. Instead, the reasons given in Wilko reflect a general suspicion of the desirability of arbitration and the competence of arbitral tribunals — most apply with no greater force to the arbitration of securities disputes than to the arbitration of legal disputes generally. It is difficult to reconcile Wilko's mistrust of the arbitral process with this Court's subsequent decisions involving the Arbitration Act. See, e. g., Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., supra; Dean Witter Reynolds Inc. v. Byrd, 470 U. S. 213 (1985); Southland Corp. v. Keating, 465 U. S. 1 (1984); Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U. S. 1 (1983); Scherk v. Alberto-Culver Co., 417 U. S. 506 (1974).
Indeed, most of the reasons given in Wilko have been rejected subsequently by the Court as a basis for holding claims to be nonarbitrable. In Mitsubishi, for example, we recognized that arbitral tribunals are readily capable of handling the factual and legal complexities of antitrust claims, notwithstanding the absence of judicial instruction and supervision. See 473 U. S., at 633-634. Likewise, we have concluded that the streamlined procedures of arbitration do not entail any consequential restriction on substantive rights. Id., at 628. Finally, we have indicated that there is no reason to assume at the outset that arbitrators will not follow the law; although judicial scrutiny of arbitration awards necessarily is limited, such review is sufficient to ensure that arbitrators comply with the requirements of the statute. See id., at 636-637, and n. 19 (declining to assume that arbitration will not be resolved in accordance with statutory law, but reserving consideration of "effect of an arbitral tribunal's failure to take cognizance of the statutory cause of action on the claimant's capacity to reinstate suit in federal court").
The suitability of arbitration as a means of enforcing Exchange Act rights is evident from our decision in Scherk. Although the holding in that case was limited to international agreements, the competence of arbitral tribunals to resolve § 10(b) claims is the same in both settings. Courts likewise have routinely enforced agreements to arbitrate § 10(b) claims where both parties are members of a securities exchange or the National Association of Securities Dealers (NASD), suggesting that arbitral tribunals are fully capable of handling such matters. See, e. g., Axelrod & Co. v. Kordich, Victor & Neufeld, 320 F. Supp. 193 (SDNY 1970), aff'd, 451 F. 2d 838 (CA2 1971); Brown v. Gilligan, Will & Co., 287 F. Supp. 766 (SDNY 1968). And courts uniformly have concluded that Wilko does not apply to the submission to arbitration of existing disputes, see, e. g., Gardner v. Shearson, Hammill & Co., 433 F. 2d 367 (CA5 1970); Moran v. Paine, Webber, Jackson & Curtis, 389 F. 2d 242 (CA3 1968), even though the inherent suitability of arbitration as a means of resolving § 10(b) claims remains unchanged. Cf. Mitsubishi, 473 U. S., at 633.
Thus, the mistrust of arbitration that formed the basis for the Wilko opinion in 1953 is difficult to square with the assessment of arbitration that has prevailed since that time. This is especially so in light of the intervening changes in the regulatory structure of the securities laws. Even if Wilko's assumptions regarding arbitration were valid at the time Wilko was decided, most certainly they do not hold true today for arbitration procedures subject to the SEC's oversight authority.
In 1953, when Wilko was decided, the Commission had only limited authority over the rules governing self-regulatory organizations (SROs) — the national securities exchanges and registered securities associations — and this authority appears not to have included any authority at all over their arbitration rules. See Brief for Securities and Exchange Commission as Amicus Curiae 14-15. Since the 1975 amendments to § 19 of the Exchange Act, however, the Commission has had expansive power to ensure the adequacy of the arbitration procedures employed by the SROs. No proposed rule change may take effect unless the SEC finds that the proposed rule is consistent with the requirements of the Exchange Act, 15 U. S. C. § 78s(b)(2); and the Commission has the power, on its own initiative, to "abrogate, add to, and delete from" any SRO rule if it finds such changes necessary or appropriate to further the objectives of the Act, 15 U. S. C. § 78s(c). In short, the Commission has broad authority to oversee and to regulate the rules adopted by the SROs relating to customer disputes, including the power to mandate the adoption of any rules it deems necessary to ensure that arbitration procedures adequately protect statutory rights.
In the exercise of its regulatory authority, the SEC has specifically approved the arbitration procedures of the New York Stock Exchange, the American Stock Exchange, and the NASD, the organizations mentioned in the arbitration agreement at issue in this case. We conclude that where, as in this case, the prescribed procedures are subject to the Commission's § 19 authority, an arbitration agreement does not effect a waiver of the protections of the Act. While stare decisis concerns may counsel against upsetting Wilko's contrary conclusion under the Securities Act, we refuse to extend Wilko's reasoning to the Exchange Act in light of these intervening regulatory developments. The McMahons' agreement to submit to arbitration therefore is not tantamount to an impermissible waiver of the McMahons' rights under § 10(b), and the agreement is not void on that basis under § 29(a).
The final argument offered by the McMahons is that even if § 29(a) as enacted does not void predispute arbitration agreements, Congress subsequently has indicated that it desires § 29(a) to be so interpreted. According to the McMahons, Congress expressed this intent when it failed to make more extensive changes to § 28(b), 15 U. S. C. §78bb(b), in the 1975 amendments to the Exchange Act. Before its amendment, § 28(b) provided in relevant part:
"Nothing in this chapter shall be construed to modify existing law (1) with regard to the binding effect on any member of any exchange of any action taken by the authorities of such exchange to settle disputes between its members, or (2) with regard to the binding effect of such action on any person who has agreed to be bound thereby, or (3) with regard to the binding effect on any such member of any disciplinary action taken by the authorities of the exchange." 48 Stat. 903.
The chief aim of this provision was to preserve the self-regulatory role of the securities exchanges, by giving the exchanges a means of enforcing their rules against their members. See, e. g., Tullis v. Kohlmeyer & Co., 551 F. 2d 632, 638 (CA5 1977) ("[P]reserv[ing] for the stock exchanges a major self-regulatory role . is the basis of § 28(b)"); Axelrod & Co. v. Kordich, Victor & Neufeld, 451 F. 2d, at 840-841. In 1975, Congress made extensive revisions to the Exchange Act intended to "clarify the scope of the self-regulatory responsibilities of national securities exchanges and registered securities associations . . . and the manner in which they are to exercise those responsibilities." S. Rep. No. 94-75, p. 22 (1975). In making these changes, the Senate Report observed: "The self-regulatory organizations must exercise governmental-type powers if they are to carry out their responsibilities under the Exchange Act. When a member violates the Act or a self-regulatory organization's rules, the organization must be in a position to impose appropriate penalties or to revoke relevant privileges." Id., at 24.
The amendments to § 28 reflect this objective. Paragraph (3) of § 28(b) was deleted and replaced with new § 28(c), which provided that the validity of any disciplinary action taken by an SRO would not be affected by a subsequent decision by the SEC to stay or modify the sanction. See 15 U. S. C. §78bb(c). At the same time, § 28(b) was expanded to ensure that all SROs as well as the Municipal Securities Rule-making Board had the power to enforce their substantive rules against their members. Section 28(b), as amended, provides:
"Nothing in this chapter shall be construed to modify existing law with regard to the binding effect (1) on any member of or participant in any self-regulatory organization of any action taken by the authorities of such organization to settle disputes between its members or participants, (2) on any municipal securities dealer or municipal securities broker of any action taken pursuant to a procedure established by the Municipal Securities Rulemaking Board to settle disputes between municipal securities dealers and municipal securities brokers, or (3) of any action described in paragraph (1) or (2) on any person who has agreed to be bound thereby."
Thus, the amended version of § 28(b), like the original, mentions neither customers nor arbitration. It is directed at an entirely different problem: enhancing the self-regulatory function of the SROs under the Exchange Act.
The McMahons nonetheless argue that we should find it significant that Congress did not take this opportunity to address the general question of the arbitrability of Exchange Act claims. Their argument is based entirely on a sentence from the Conference Report, which they contend amounts to a ratification of Wilko's extension to Exchange Act claims. The Conference Report states:
"The Senate bill amended section 28 of the Securities Exchange Act of 1934 with respect to arbitration proceedings between self-regulatory organizations and their participants, members, or persons dealing with members or participants. The House amendment contained no comparable provision. The House receded to the Senate. It was the clear understanding of the conferees that this amendment did not change existing law, as articulated in Wilko v. Swan, 346 U. S. 427 (1953), concerning the effect of arbitration proceedings provisions in agreements entered into by persons dealing with members and participants of self-regulatory organizations." H. R. Conf. Rep. No. 94-229, p. 111 (1975).
The McMahons contend that the conferees would not have acknowledged Wilko in a revision of the Exchange Act unless they were aware of lower court decisions extending Wilko to § 10(b) claims and intended to approve them. We find this argument fraught with difficulties. We cannot see how Congress could extend Wilko to the Exchange Act without enacting into law any provision remotely addressing that subject. See Train v. City of New York, 420 U. S. 35, 45 (1975). And even if it could, there is little reason to interpret the Report as the McMahons suggest. At the out-. set, the committee may well have mentioned Wilko for a reason entirely different from the one postulated by the Mc-Mahons — lower courts had applied § 28(b) to the Securities Act, see, e. g., Axelrod & Co. v. Kordich, Victor & Neufeld, supra, at 843, and the committee may simply have wished to make clear that the amendment to § 28(b) was not otherwise intended to affect Wilko's construction of the Securities Act. Moreover, even if the committee were referring to the arbitrability of § 10(b) claims, the quoted sentence does not disclose what committee members thought "existing law" provided. The conference members might have had in mind the two Court of Appeals decisions extending Wilko to the Exchange Act, as the McMahons contend. See Greater Continental Corp. v. Schechter, 422 F. 2d 1100 (CA2 1970); Moran v. Paine, Webber, Jackson & Curtis, 389 F. 2d 242 (CA3 1968). It is equally likely, however, that the committee had in mind this Court's decision the year before expressing doubts as to whether Wilko should be extended to § 10 (b) claims. See Scherk v. Alberto-Culver Co., 417 U. S., at 513 ("[A] colorable argument could be made that even the semantic reasoning of the Wilko opinion does not control [a case based on § 10(b)]"). Finally, even assuming the conferees had an understanding of existing law that all agreed upon, they specifically disclaimed any intent to change it. Hence, the Wilko issue was left to the courts: it was unaffected by the amendment to § 28(b). This statement of congressional inaction simply does not support the proposition that the 1975 Congress intended to engraft onto unamended § 29(a) a meaning different from that of the enacting Congress.
We conclude, therefore, that Congress did not intend for § 29(a) to bar enforcement of all predispute arbitration agreements. In this case, where the SEC has sufficient statutory authority to ensure that arbitration is adequate to vindicate Exchange Act rights, enforcement does not effect a waiver of "compliance with any provision" of the Exchange Act under § 29(a). Accordingly, we hold the McMahons' agreements to arbitrate Exchange Act claims "enforceable] . in accord with the explicit provisions of the Arbitration Act." Scherk v. Alberto-Culver Co., supra, at 520.
> hH
Unlike the Exchange Act, there is nothing in the text of the RICO statute that even arguably evinces congressional intent to exclude civil RICO claims from the dictates of the Arbitration Act. This silence in the text is matched by silence in the statute's legislative history. The private treble-damages provision codified as 18 U. S. C. § 1964(c) was added to the House version of the bill after the bill had been passed by the Senate, and it received only abbreviated discussion in either House. See Sedima, S. P. R. L. v. Imrex Co., 473 U. S. 479, 486-488 (1985). There is no hint in these legislative debates that Congress intended for RICO treble-damages claims to be excluded from the ambit of the Arbitration Act. See Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 815 F. 2d 840, 850-851 (CA2 1987); Mayaja, Inc. v. Bodkin, 803 F. 2d 157, 164 (CA5 1986).
Because RICO's text and legislative history fail to reveal any intent to override the provisions of the Arbitration Act, the McMahons must argue that there is an irreconcilable conflict between arbitration and RICO's underlying purposes. Our decision in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S. 614 (1985), however, already has addressed many of the grounds given by the McMahons to support this claim. In Mitsubishi, we held that nothing in the nature of the federal antitrust laws prohibits parties from agreeing to arbitrate antitrust claims arising out of international commercial transactions. Although the holding in Mitsubishi was limited to the international context, see id., at 629, much of its reasoning is equally applicable here. Thus, for example, the McMahons have argued that RICO claims are too complex to be subject to arbitration. We determined in Mitsubishi, however, that "potential complexity should not suffice to ward off arbitration." Id., at 633. Antitrust matters are every bit as complex as RICO claims, but we found that the "adaptability and access to expertise" characteristic of arbitration rebutted the view "that an arbitral tribunal could not properly handle an antitrust matter." Id., at 633-634.
Likewise, the McMahons contend that the "overlap" between RICO's civil and criminal provisions renders § 1964(c) claims nonarbitrable. See Page v. Moseley, Hallgarten, Estabrook & Weeden, Inc., 806 F. 2d 291, 299, n. 13 (CA1 1986) ("[T]he makings of a 'pattern of racketeering' are not yet clear, but the fact remains that a 'pattern' for civil purposes is a 'pattern' for criminal purposes"). Yet § 1964(c) is no different in this respect from the federal antitrust' laws. In Sedima, S. P. R. L. v. Imrex Co., supra, we rejected the view that § 1964(c) "provide [s] civil remedies for offenses criminal in nature." See 473 U. S., at 492. In doing so, this Court observed: "[T]he fact that conduct can result in both criminal liability and treble damages does not mean that there is not a bona fide civil action. The familiar provisions for both criminal liability and treble damages under the antitrust laws indicate as much." Ibid. Mitsubishi recognized that treble-damages suits for claims arising under § 1 of the Sherman Act may be subject to arbitration, even though such conduct may also give rise to claims of criminal liability. See Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., supra. We similarly find that the criminal provisions of RICO do not preclude arbitration of bona fide civil actions brought under § 1964(c).
The McMahons' final argument is that the public interest in the enforcement of RICO precludes its submission to arbitration. Mitsubishi again is relevant to the question. In that case we thoroughly examined the legislative intent behind § 4 of the Clayton Act in assaying whether the importance of the private treble-damages remedy in enforcing the antitrust laws precluded arbitration of § 4 claims. We found that "[notwithstanding its important incidental policing function, the treble-damages cause of action . . . seeks primarily to enable an injured competitor to gain compensation for that injury." 473 U. S., at 635. Emphasizing the priority of the compensatory function of § 4 over its deterrent function, Mitsubishi concluded that "so long as the prospective litigant effectively may vindicate its statutory cause of action in the arbitral forum, the statute will continue to serve both its remedial and deterrent function." Id., at 637.
The legislative history of § 1964(c) reveals the same emphasis on the remedial role of the treble-damages provision. In introducing the treble-damages provision to the House Judiciary Committee, Representative Steiger stressed that "those who have been wronged by organized crime should at least be given access to a legal remedy." Hearings on S. 30 and Related Proposals before Subcommittee No. 5 of the House Committee on the Judiciary, 91st Cong., 2d Sess., 520 (1970). The policing function of § 1964(c), although impor tant, was a secondary concern. See ibid. ("In addition, the availability of such a remedy would enhance the effectiveness of title IX's prohibitions"). During the congressional debates on § 1964(c), Representative Steiger again emphasized the remedial purpose of the provision: "It is the intent of this body, I am certain, to see that innocent parties who are the victims of organized crime have a right to obtain proper redress. . It represents the one opportunity for those of us who have been seriously affected by organized crime activity to recover." 116 Cong. Rec. 35346-36347 (1970). This focus on the remedial function of § 1964(c) is reinforced by the recurrent references in the legislative debates to §4 of the Clayton Act as the model for the RICO treble-damages provision. See, e. g., 116 Cong. Rec. 35346 (statement of Rep. Poff) (RICO provision "has its counterpart almost in haec verba in the antitrust statutes"); id., at 25190 (statement of Sen. McClellan) (proposed amendment would "authorize private civil damage suits based upon the concept of section 4 of the Clayton Antitrust Act"). See generally Sedima, S. P. R. L. v. Imrex Co., 473 U. S., at 489 ("The clearest current in [RICO's] history is the reliance on the Clayton Act model").
Not only does Mitsubishi support the arbitrability of RICO claims, but there is even more reason to suppose that arbitration will adequately serve the purposes of RICO than that it will adequately protect private enforcement of the antitrust laws. Antitrust violations generally have a widespread impact on national markets as a whole, and the antitrust treble-damages provision gives private parties an incentive to bring civil suits that serve to advance the national interest in a competitive economy. See Lindsay, "Public" Rights and Private Forums: Predispute Arbitration Agreements and Securities Litigation, 20 Loyola (LA) L. Rev. 643, 691-692 (1987). RICO's drafters likewise sought to provide vigorous incentives for plaintiffs to pursue RICO claims that would advance society's fight against organized crime. See Sedima, S. P. R. L. v. Imrex Co., supra, at 498. But in fact RICO actions are seldom asserted "against the archetypal, intimidating mobster." Id., at 499; see also id., at 506 (Marshall, J., dissenting) ("[0]nly 9% of all civil RICO cases have involved allegations of criminal activity normally associated with professional criminals"). The special incentives necessary to encourage civil enforcement actions against organized crime do not support nonarbitrability of run-of-the-mill civil RICO claims brought against legitimate enterprises. The private attorney general role for the typical RICO plaintiff is simply less plausible than it is for the typical antitrust plaintiff, and does not support a finding that there is an irreconcilable conflict between arbitration and enforcement of the RICO statute.
In sum, we find no basis for concluding that Congress intended to prevent enforcement of agreements to arbitrate RICO claims. The McMahons may effectively vindicate their RICO claim in an arbitral forum, and therefore there is no inherent conflict between arbitration and the purposes underlying § 1964(c). Moreover, nothing in RICO's text or legislative history otherwise demonstrates congressional intent to make an exception to the Arbitration Act for RICO claims. Accordingly, the McMahons, "having made the bargain to arbitrate," will be held to their bargain. Their RICO claim is arbitrable under the terms of the Arbitration Act.
y
Accordingly, the judgment of the Court of Appeals for the Second Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Compare 788 F. 2d 94 (CA2 1986) (case below); Jacobson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 797 F. 2d 1197 (CA3 1986), cert. pending, No. 86-487; King v. Drexel Burnham Lambert, Inc., 796 F. 2d 59 (CA5 1986), cert. pending, No. 86-282; Sterne v. Dean Witter Reynolds, Inc., 808 F. 2d 480 (CA6 1987); Conover v. Dean Witter Reynolds, Inc., 794 F. 2d 520 (CA9 1986), cert. pending, No. 86-321; and Wolfe v. E. F. Hutton & Co., 800 F. 2d 1032 (CA11 1986); with Page v. Moseley, Hallgarten, Estabrook & Weeden, Inc., 806 F. 2d 291 (CA1 1986); Phillips v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 795 F. 2d 1393 (CA8 1986), cert. pending, No. 86-578.
Compare Page v. Moseley, Hallgarten, Estabrook & Weeden, supra; and 788 F. 2d 94 (CA2 1986) (case below), with Mayaja, Inc. v. Bodkin, 803 F. 2d 157 (CA5 1986). See also Jacobson v. Merrill Lynch, Pierce, Fenner & Smith, Inc., supra; Tashea v. Bache, Halsey, Stuart, Shields, Inc., 802 F. 2d 1337 (CA11 1986).
The McMahons contend that Securities Exchange Act Rel. No. 15984 (1979), [1979 Transfer Binder] CCH Fed. Sec. L. Rep. ¶ 82,122, and SEC Rule 15c2-2, 17 CFR §240.15c2-2 (1986), provide authority for the view that § 29(a) bars enforcement of predispute arbitration agreements. We agree with the Commission, however, that its actions were not based on any independent analysis of § 29(a), but instead "were premised on the Commission's assumption, based on court of appeals decisions following Wilko, . .that agreements to arbitrate Rule 10b-5 claims were not, in fact, enforceable." Brief for Securities and Exchange Commission as Amicus Curiae 18, n. 13 (citation omitted). The SEC's actions therefore do not cast any additional light on the question of the arbitrability of Exchange Act claims.