July 22, 2011 Comments (0) Blog, Securities Fraud

Potential FINRA Rule Change on Collective Actions for Financial Advisors

(Last Updated On: July 17, 2015)

According to the Investment News, Finra will be proposing a rule change that might help brokers pursue class action employment claims.

The Financial Industry Regulatory Authority Inc. wants to ban from its arbitration forums so called “collective action” claims brought under the Fair Labor Standards Act or the Age Discrimination in Employment Act.

That would make it easer to pursue court claims, according to plaintiff’s attorneys who filed the suits.

The Finra board last week authorized its staff to file a proposed rule change with the Securities and Exchange Commission. The SEC would have to approve the proposal.

The rule change is being sought after federal courts last fall, and again in February of this year, ordered that collective-action wage-and-hour cases be heard in Finra arbitrations.

Finra has maintained that these types of cases, as well as class actions, are not allowed in its dispute resolution system. However, its rules mention class actions only.

Collective actions require covered plaintiffs to opt into the lawsuit, whereas class actions require an opt-out.

It appears that a rule change by Finra would help brokers pursue wage-and-hour claims.

In the past, in banning class actions from the Finra arbitration system, Finra and the SEC have argued that such cases are better handled by courts.

Several years ago, all the major brokerage firms settled broker suits over alleged violation of wage-and-hour laws, as well as overtime violations. As a result, firms adjusted their expense-sharing policies and compensation plans, and some brokers received payments.

If you are a broker seeking representation in an employment dispute with your current or former employer, the securities attorneys of The White Law Group may be able to help.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Boca Raton, Florida.

For more information on The White Law Group, please visit our website at http://www.whitesecuritieslaw.com.


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