FINRA Settles Dispute Over Class Action Waivers

Posted on May 7th, 2014 at 8:30 AM

From the Desk of Jim Eccleston at Eccleston Law Offices:

Charles Schwab & Co. has agreed to pay $500,000 to settle a complaint by FINRA that Schwab had violated FINRA rules by including class action waivers in more than 6.8 million customer contracts. Schwab is required to notify customers that the controversial provision has been withdrawn from its customer contracts and is no longer in effect.

The settlement follows an unusual ruling by the Board of Governors, reversing a 2013 decision that claimed such waivers were allowed under the Federal Arbitration Act (“FAA”), and sending a stew message to brokerage firms that FINRA will not tolerate attempts to make arbitration clauses unfair.

The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.

Related Attorneys: James J. Eccleston


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