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FINRA Panel Holds Wall Street Powerhouse Can Prohibit Investors From Participating In Class Action Suits

The Financial Industry Regulatory Authority (“FINRA”), Wall Street’s self-regulatory organization, recently announced that it will appeal a ruling that allowed Charles Schwab & Co., Inc. (“Charles Schwab”) to require customers to waive their right to participate in class-action suits.

In February 2013, a FINRA hearing panel upheld Charles Schwab’s use of arbitration agreements that require customers to bring all disputes into FINA-run arbitration forums. In 2012, FINRA brought charges against the company, alleging that its arbitration agreements violated FINRA rules permitting customers to pursue class action claims in lieu of arbitration. FINRA claimed that by requiring customers to bring all disputes into arbitration forums, Charles Schwab forced customers to waive their right to participate in class-action suits. The panel held that, although Charles Schwab’s actions violated FINRA rules, the FINRA rules themselves violated the National Arbitration Act. The ruling essentially prohibits investors from pursuing class action lawsuits if they have signed arbitration agreements. FINRA has forty five days to appeal to its National Adjudicatory Council, its internal appellate board.

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Categories: LitigationAlternative Dispute Resolution
Tags: Jamie A. ColeEdward G. GuedesMichael S. PopokJoseph H. SerotaFort Lauderdale Business Litigation AttorneysFort Lauderdale Business Litigation LawyersMiami Commercial Litigation AttorneyMiami Commercial Litigation LawyerSouth Florida Commercial Litigation AttorneySouth Florida Commercial Litigation LawyerSouth Florida Business Dispute Litigation AttorneysSouth Florida Business Dispute Litigation LawyersFort Lauderdale LitigatorsMiami LitigatorsSouth Florida LitigatorsAlternative Dispute ResolutionFlorida Commercial Litigation LawyerFlorida Litigation AttorneysFort Lauderdale Civil Litigation AttorneysFort Lauderdale Commercial Litigation AttorneysFort Lauderdale Commercial Litigation AttorneysMiami Commercial Litigation AttorneyMiami Litigation AttorneySecurities and Exchange Commission
Author(s): Brooke P. Dolara

Plaintiffs Alleging Securities Fraud Face Difficulty Establishing Prima Facie Case

The Eleventh Circuit Court of Appeals recently issued an opinion addressing what elements a plaintiff in a private securities fraud case must prove in order to establish a prima facie case. In Hubbard v. BankAtlantic Bancorp, Inc., 2012 WL 2985112 (11th Cir. Jul. 23, 2012), the Court held that the plaintiff had to prove loss causation, or that the plaintiff’s loss can be attributed to the defendants’ fraud and not ancillary factors unrelated to the defendant’s actions. The decision highlights the difficulty for most plaintiffs in establishing a prima facie case of securities fraud in a turbulent economic environment.

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Categories: LitigationFederal LawFederal CourtsTorts
Tags: Market Share LiabilityFort Lauderdale Business Litigation AttorneysFort Lauderdale Business Litigation LawyersMiami Commercial Litigation AttorneyMiami Commercial Litigation LawyerSouth Florida Commercial Litigation AttorneySouth Florida Commercial Litigation LawyerSouth Florida Business Dispute Litigation AttorneysSouth Florida Business Dispute Litigation LawyersSouth Florida Private Transactions AttorneysSouth Florida Private Transactions LawyersFort Lauderdale Private Transactions AttorneysFort Lauderdale LitigatorsMiami LitigatorsFlorida Commercial Litigation LawyerFlorida Litigation AttorneysFort Lauderdale Civil Litigation AttorneysFort Lauderdale Commercial Litigation AttorneysMiami Construction LawyerMiami Commercial Litigation AttorneySecurities and Exchange Commission
Author(s): Brooke P. Dolara

SEC Asks Congress for Greater Control Over Municipal Bond Market

The Securities and Exchange Commission("SEC") recently released a report on the municipal bond market which requests Congressional approval for authority to regulate municipal bond issuers and the required content of disclosure documents provided to investors. Under current law, municipal issuers are required to comply with the broad antifraud provisions of federal and state securities laws, but are not directly regulated by the SEC. The SEC currently has authority to regulate broker-dealers and municipal securities dealers, which has an indirect impact on the municipal marketplace. The requested authority would provide the SEC, for the first time, with direct authority over municipal bond issuers.

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Categories: Government AffairsLocal GovernmentFederal Law
Tags: Jeffrey DeCarloFort Lauderdale Municipal AttorneysMiami Municipal AttorneysSouth Florida Municipal AttorneysSouth Florida Private Transactions AttorneysSouth Florida Private Transactions LawyersFort Lauderdale Private Transactions AttorneysMiami Private Transactions AttorneysSouth Florida Public Transactions LawFort Lauderdale Public Transactions LawMiami Public Transactions Law Public FinanceSecurities and Exchange CommissionMunicipal Bonds
Author(s): Jeffrey DeCarlo