Department of Enforcement v. Charles Schwab & Company, Inc., Disciplinary Proceeding No. 2011029760201

FINRA hearing panel rules Schwab can ban client class action suits.

By
Samuel E. Cohen

A Financial Industry Regulatory Authority hearing panel ruled that Charles Schwab can prohibit its customers from bringing class action lawsuits. The panel said the ban violates FINRA's rules, but that those rules conflict with the Federal Arbitration Act and are, therefore, not enforceable. The ruling is expected to sway other brokerage firms to follow suit.

Case Law Alerts - 2nd Quarter 2013