Department of Enforcement v. Charles Schwab & Co. Inc.
Published: Mar. 23, 2013 | Result Date: Feb. 21, 2013 | Filing Date: Jan. 1, 1900 |Case number: 2011029760201 Arbitration – Respondent
Court
FINRA
Attorneys
Claimant
Respondent
Gilbert R. Serota
(Arnold & Porter Kaye Scholer LLP)
Julian Y. Waldo
(Supreme Court of California)
Facts
Charles Schwab & Co. amended its customer agreements to include class action waivers in October 2011, in response to the U.S. Supreme court decision in AT&T v. Concepcion. The Dept. of Enforcement filed a disciplinary action against Charles Schwab, alleging that the waivers were unlawful.
Result
The Financial Industry Regulatory Authority found that the Dept. could not block respondent from including class action waivers in its customer arbitration agreements. Although it found that the waivers might have violated FINRA's own rules, it determined that the Dept. could not enforce them given that the FAA preempted them.
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