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Court Dismisses Charles Schwab Suit that Challenged FINRA on Class Action Waivers
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May 13, 2012 @ 4:43 pm |
A federal court in California dismissed a complaint filed by Charles Schwab Corp. that tried to block regulators from disciplining the brokerage firm for embedding a clause in its customer account agreements that precludes class-action lawsuits.
The Financial Industry Regulatory Authority (FINRA) alleged in a complaint filed in February with its Office of Hearing Officers that Schwab added a "Waiver of Class Action or Representative Action" to more than 6.8 million customer account agreements in October 2011 that would prohibit customers from starting or joining class-action lawsuits against the brokerage firm.
The complaint said that the class action waiver would incorrectly lead millions of Schwab customers to believe that they did not have the right to bring or participate in class action against Schwab, or to consolidate...
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