Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Friday, February 3, 2012

Schwab Sues FINRA, Seeks Declaratory Judgment It Can Prohibit Class and Consolidated Claims

In a blog yesterday, I reported that Charles Schwab has filed a declaratory judgment action against FINRA in federal district court in Northern California in response to FINRA's institution of a disciplinary action against the firm.  The issue is whether Schwab's amending its customer agreements to bar class actions in court and to prevent arbitrators from consolidating individual claims is legal and enforceable.  FINRA asserts the changes violate its rules; Schwab disputes this, but says that in any event the recent U.S. Supreme Court opinions in Concepcion and Compucredit override FINRA's rules.

I will have more to say about the litigation later, but in the meantime here is the Schwab complaint (Download Schwab Complaint).

http://lawprofessors.typepad.com/securities/2012/02/schwab-sues-finra-seeks-declaratory-judgment-it-can-prohibit-class-and-consolidated-claims.html

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