FINRA’S Battle Over Class-Action Waivers Could Reach Supreme Court

The past few weeks we have detailed the battle between FINRA and Charles Schwab over the company’s uses of class action waivers in its arbitration agreements. Most recently, it has been discussed that this battle may be settled in the United States Supreme Court.

The case is currently with FINRA’s National Adjudicatory Council (NAC). If it continues beyond the NAC, appeals will be heard by the SEC, then a U.S. Circuit Court of Appeals, and finally the United States Supreme Court.

Kevin Carroll, associate general counsel at SIFMA, does not believe it will reach the Supreme Court. He stated “the hearing panel decision turns on its application of Supreme Court precedent…specifically AT&T Mobility LLC v. Concepcion…FINRA must overcome the underpinnings of the hearing panel decision which was thoroughly reasoned. In the AT&T Mobility case, which the hearing panel cited in its decision last week, the Supreme Court threw out a California law banning class action waivers in arbitration agreements.”