In a decision that could alter how clients take action against brokerage firms, a Financial Industry Regulatory Authority panel has ruled that Charles Schwab Corp. had the right to bar customers from engaging in class action lawsuits against it.
In September 2011, Schwab amended its customer account agreement to include a class-action waiver provision, requiring that all disputes be arbitrated. FINRA’s Enforcement Department challenged the move because its rules prohibit the use of class action waivers by brokerage and investment banking firms. On Thursday, a Financial Industry Regulatory Authority disciplinary panel upheld Schwab’s decision to do so anyway.
