Curbing shareholders’ ability to sue companies would be a “significant mistake” that harms the US capital markets, leading Democrats have warned, foreshadowing a potentially bitter fight to protect decades-old investor rights.

The Securities and Exchange Commission was scheduled on Wednesday to discuss the possibility of allowing listed companies to require arbitration of shareholder claims, something that would move disputes out of the glare of the court system.

In a letter ahead of the public meeting, Elizabeth Warren, ranking member of the Senate banking committee, said that any such move would eliminate a critical tool for investors and allow misconduct to go unpunished. Democratic senator Jack Reed of Rhode Island also signed the letter.