FINRA Charges Charles Schwab with Rule Violations
The Financial Industry Regulatory Authority (FINRA) accused Charles Schwab Corporation of limiting customers legal rights in a complaint filed on February 1, 2012.
FINRA’s complaint alleges that Charles Schwab & Company violates FINRA rules by requiring its customers to waive their rights to bring class action lawsuits against the firm.
Schwab reportedly modified its customer account agreement in October, 2011, to include a provision requiring customers to waive their rights to bring or participate in class action lawsuits where Schwab is named as a defendant.
Almost 7 million Schwab customers received the amended agreements.
According to a FINRA news release:
“The agreement also included a provision requiring customers to agree that arbitrators in arbitration proceedings would not have the authority to consolidate more than one party’s claims. FINRA’s complaint charges that both provisions violate FINRA rules concerning language or conditions that firms may place in customer agreements.
FINRA’s complaint seeks an expedited hearing because Schwab’s conduct is ongoing, as the firm has continued to use account agreements containing these provisions in opening more than 50,000 new customer accounts since October 2011.”
If you are an active stock market investor and have a Schwab account, this provision may apply to you. Contact Fort Lauderdale securities attorney Howard Kahn, Esq. at 954-321-0176 or via email to discuss your case.
Click here to read a copy of FINRA’s complaint against Charles Schwab.