FINRA Board of Governors Invalidates Class Action Waivers in Customer Account Agreements

In an April 24th ruling that will have widespread impact among financial institutions, the FINRA Board of Governors held that a broker-dealer violated FINRA rules by including a mandatory class action waiver in its customer account agreements.

According to FINRA’s release, following the Board decision, Charles Schwab & Company entered into a settlement with FINRA, agreeing to pay a fine of $500,000 and to notify all of its customers that the class action waiver requirement was withdrawn.

Please see full alert below for more information.

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Topics:  Broker-Dealer, Charles Schwab, Class Action Arbitration Waivers, Federal Arbitration Act, FINRA

Published In: Civil Procedure Updates, Conflict of Laws Updates, Consumer Protection Updates, Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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