Temporarily, At Least, It Looks Like The End Of Class-Action Lawsuits Hot

0.0 (0)
Write Review
The decision has far-reaching implications. It opens the door for other firms to adopt arbitration agreements like Schwab’s that essentially preclude clients from participating in class-action suits.
Every broker-dealer would like to insulate themselves against class-action litigation—or any other type, for that matter.
The third charge against Schwab involved an attempt to limit the liability of arbitrators to consolidate individual claims in arbitration.
FINRA ordered Schwab to eliminate that language from its agreements and fined the firm $500,000.
The decision can be appealed to FINRA’s National Adjudicatory Council (NAC). The NAC can also take the first step and decide to review the case. If nothing is done after 45 days, the decision becomes final.
So far, Schwab has not commented about making an appeal. The firm feels arbitration is more effective for both it and its clients.
But the case is an important one so some type of review is likely. FINRA does not allow class-action claims to be filed within its arbitration system so precluding class action by clients in court effectively does away with them.


This Website Is For Financial Professionals Only

User reviews and Comments

There are no user reviews/comments for this listing.
Already have an account? or Create an account