Cariveau

This action concerns the validity of a confidentiality clause in a settlement agreement that prohibited the customer in a securities transaction from discussing the selling agent’s misconduct with regulatory authorities. The trial court refused to enforce the clause on grounds of public policy. We agree and affirm.

Background

Marion L. Hixon joined the staff of The Equitable Life Assurance Society of the United States (Equitable) as an insurance agent in 1987 and subsequently became a registered agent under the rules of the National Association of Securities Dealers, Inc. (NASD). In November of 1992, Loralynn Halferty consulted Hixon about investing approximately $200,000 she inherited from her father. Initially, Halferty invested in mutual funds and trust funds with Equitable through Hixon. In January of 1993, Halferty invested $79,950 in two real estate limited partnerships and $10,000 in a Nevada corporation named Jendevco. Hixon was the general partner of the partnerships and president of the corporation.

Shortly after making these investments, Halferty conferred with other investment advisers and concluded that the investments recommended by Hixon were risky and…