Reuters: Regulatory News: US court dismisses Schwab suit to halt FINRA action

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

US court dismisses Schwab suit to halt FINRA action May 11th 2012, 22:25 Fri May 11, 2012 6:46pm EDT May 11 (Reuters) - A federal court judge on Friday threw out a lawsuit by Charles Schwab Corp that sought to stop its regulator from bringing a disciplinary case against the company for trying to take away customers' rights to sue it in class-action lawsuits. Magistrate Judge Elizabeth Laporte of the U.S. District Court for the Northern District of California late on Friday granted a request by the Financial Industry Regulatory Authority to dismiss a lawsuit that Schwab filed against the regulator in February. The San Francisco-based brokerage sued FINRA, Wall Street's industry-funded watchdog, a day after the regulator announced an enforcement case against the company. FINRA alleged that Schwab added a new provision to more than 6.8 million customer account agreements in October that would preclude them from starting or joining class-action lawsuits against the brokerage. The case raised significant investor protection issues, according to lawyers. Class actions are a common way for small investors to band together in a court case to recover their losses. A win by Schwab would set the stage for a showdown that could lead other companies to change their arbitration agreements and potentially weaken FINRA's hold over its own enforcement process, they say. Judge Laporte, in a 21-page opinion, agreed with FINRA that Schwab, which FINRA regulates, is required to follow its procedures for disciplinary cases. That process ultimately includes a review by a federal court judge. A spokesperson for Schwab was not immediately available for comment. A FINRA spokeswoman declined to comment.

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions