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FINRA Reverses Hearing Panel in Schwab Enforcement Case: Class Action Waiver Violates FINRA Rules
May 14, 2014
In a stunning but hoped-for result (based on am amicus brief I co-authored in the case), FINRA’s Board of Governors reversed a disciplinary hearing panel decision in the FINRA v Schwab enforcement action. (See some of my previous blog posts on the subject, here, here and here.) That hearing panel had held, among other things, that Schwab’s class action waiver in its standard customer agreement’s pre-dispute arbitration clause violated FINRA rules but those rules could not be enforced...
May 14, 2014
In a stunning but hoped-for result (based on am amicus brief I co-authored in the case), FINRA’s Board of Governors reversed a disciplinary hearing panel decision in the FINRA v Schwab enforcement action. (See some of my previous blog posts on the subject, here, here and here.) That hearing panel had held, among other things, that Schwab’s class action waiver in its standard customer agreement’s pre-dispute arbitration clause violated FINRA rules but those rules could not be enforced...
FINRA Arbitration Rules Prohibiting Class Waiver NOT Preempted
September 20, 2013
From the BNA Labor Reports: “A federal district court in New York Sept. 11 declined to compel financial solutions analysts pursuing a class and collective overtime action against brokerage firm Merrill Lynch to individually arbitrate their claims under the procedures of the Financial Industry Regulatory Authority (Zeltser v. Merrill Lynch & Co., S.D.N.Y., No. 1:13-cv-01531, 9/11/13). The Merrill Lynch employees, like others in the securities industry, were required to sign agreements to arbitrate...
September 20, 2013
From the BNA Labor Reports: “A federal district court in New York Sept. 11 declined to compel financial solutions analysts pursuing a class and collective overtime action against brokerage firm Merrill Lynch to individually arbitrate their claims under the procedures of the Financial Industry Regulatory Authority (Zeltser v. Merrill Lynch & Co., S.D.N.Y., No. 1:13-cv-01531, 9/11/13). The Merrill Lynch employees, like others in the securities industry, were required to sign agreements to arbitrate...
FINRA to Conduct Background Checks on Arbitrators
July 17, 2013
BNA has reported that FINRA has implemented a new policy and will now conduct annual background checks as well as an additional review of arbitrators before appointing them to new cases. This change in policy was prompted by FINRA’s discovery last year that one of its arbitrators had been indicted for the uanuthorized practice of law. It’s too bad that the forum needs to implement measures such as these to make sure the parties have neutral and ethical arbitrators; the arbitrator’s disclosure...
July 17, 2013
BNA has reported that FINRA has implemented a new policy and will now conduct annual background checks as well as an additional review of arbitrators before appointing them to new cases. This change in policy was prompted by FINRA’s discovery last year that one of its arbitrators had been indicted for the uanuthorized practice of law. It’s too bad that the forum needs to implement measures such as these to make sure the parties have neutral and ethical arbitrators; the arbitrator’s disclosure...
Schwab Removes Class Action Waiver from Customer Agreements
June 3, 2013
Responding to substantial pressure from regulators and the investing public, the brokerage firm Charles Schwab reversed itself...
June 3, 2013
Responding to substantial pressure from regulators and the investing public, the brokerage firm Charles Schwab reversed itself...
Do Broker-Dealers Have a Green Light to Force Investors to Waive Class Actions in Court?
April 2, 2013
Virtually all brokerage firms’ customer agreements require arbitration of disputes in the Financial Industry Regulatory Authority (FINRA) forum. FINRA regulates the contents of these predispute arbitration agreements (PDAAs) and prohibits broker-dealers from requiring customers to give up the right to bring class actions in court. A FINRA hearing officer, however, recently ruled that FINRA’s prohibition on class action waivers was unenforceable because it conflicted with the Federal Arbitration...
April 2, 2013
Virtually all brokerage firms’ customer agreements require arbitration of disputes in the Financial Industry Regulatory Authority (FINRA) forum. FINRA regulates the contents of these predispute arbitration agreements (PDAAs) and prohibits broker-dealers from requiring customers to give up the right to bring class actions in court. A FINRA hearing officer, however, recently ruled that FINRA’s prohibition on class action waivers was unenforceable because it conflicted with the Federal Arbitration...
Investor Protection Meets the Federal Arbitration Act
March 22, 2013
In the past three decades, most recently in AT&T Mobility LLC v. Concepcion, the United States Supreme Court has advanced an aggressive pro-arbitration campaign, transforming the Federal Arbitration Act (FAA) into a powerful source of anti-consumer substantive arbitration law. In the aftermath of AT&T Mobility, which upheld a prohibition on class actions in a consumer contract despite state law that refused to enforce such provisions on unconscionability grounds, efforts have been made to prohibit...
March 22, 2013
In the past three decades, most recently in AT&T Mobility LLC v. Concepcion, the United States Supreme Court has advanced an aggressive pro-arbitration campaign, transforming the Federal Arbitration Act (FAA) into a powerful source of anti-consumer substantive arbitration law. In the aftermath of AT&T Mobility, which upheld a prohibition on class actions in a consumer contract despite state law that refused to enforce such provisions on unconscionability grounds, efforts have been made to prohibit...
