Charles Schwab Corp. (SCHW) has reversed course on a requirement that customers must waive their right to participate in class action lawsuits against the company.
A recent change to Charles Schwab Corp. fine print keeps customers from joining class action lawsuits, and all regulators can do is beg the brokerage not to make the change.
A Financial Industry Regulatory Authority (FINRA) hearing panel dismissed part of a claim against Charles Schwab Corp. (SCHW), saying the regulator can’t prevent the discount brokerage from requiring its customers to waive their rights to participate in class action lawsuits.
The New York Times reported on July 11, 2012, that Baltimore has been leading a battle in Manhattan federal court against the banks that determine the interest rate, the London interbank offered rate, or LIBOR, which serves as a benchmark for global borrowing and stands at the center of the latest banking scandal. According to the article, cities, states and municipal agencies nationwide, including Massachusetts, Nassau County on Long Island, and California’s public pension system, are looking at whether they suffered similar losses and are weighing legal action. Continue reading “NY Times reports that municipalities are filing suits against LIBOR banks”
In May 2012, three different sets of plaintiffs filed amended complaints in federal court in Manhattan alleging banks around the world colluded to misreport interbank borrowing rates, which are averaged to produce the LIBOR every day. In turn, LIBOR rates (which are currently determined for ten currencies) are used as the primary benchmark for short-term interest rates worldwide. The complaints alleged “LIBOR thus affects the pricing of trillions of dollars’ worth of financial transactions.” Continue reading “LIBOR antitrust complaints filed against banks”
U.S. District Judge Elizabeth Laporte in San Francisco, California, rejected as premature Charles Schwab & Co.’s challenge to the Financial Industry Regulatory Authority’s (FINRA) ban on class action waivers. Charles Schwab & Co., Inc. v. Financial Industry Regulatory Authority, No. 3:12-CV-00518 (N.D. Cal., Hon Elizabeth D. LaPorte). Judge LaPorte dismissed the case on jurisdictional grounds, finding Schwab had failed to exhaust its administrative remedies before filing suit against FINRA. The federal action followed a disciplinary action filed by FINRA against Schwab on February 1, 2012, alleging that Schwab had violated FINRA rules by seeking to impose mandatory arbitration on Schwab brokerage customers. Schwab countered that such mandatory arbitration clauses were lawful and enforceable in light of the Supreme Court’s decision in AT&T Mobility v. Concepcion. You can see a copy of the opinion at this link: Charles Schwab v. FINRA – Order Granting Defendant’s Motion to Dismiss
The Financial Industry Regulatory Authority Inc. (“FINRA”) and The Charles Schwab Corporation are engaged in a legal fight over whether a brokerage firm can avoid customer class-action claims by forcing all disputes into FINRA arbitration forums.
In a complaint filed against Schwab on February 1, FINRA claims that the brokerage is violating rules by including in arbitration agreements sent to almost 7 million customers a provision requiring investors to waive their rights to bring or participate in class actions against the firm. Continue reading “FINRA and Charles Schwab lock horns over class action waivers”