The prudent answer to this question should be probably not, but we can hold out hope.
A FINRA panel recently upheld a class action exclusion in a broker-dealer agreement to arbitrate contained in its customer agreement. In other words, the provision prohibits a customer from seeking class action status against the broker-dealer, forcing all customer complaints to be brought in arbitration.
FINRA has since appealed this decision to its National Adjudicatory Council. As such, the issue will not be firmly grounded for some time. In the interim, what should broker-dealers do.
At a minimum, broker-dealers should immediately revisit their customer agreements. Until the FINRA appeal is exhausted, it may make sense to include a provision barring customer class actions.
Although this issue remains in flux, there is a window of opportunity to limit the claims brought against you. Act now or regret it later.
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