Texas Judge Enjoins FINRA Arbitrations To Preserve Respondents’ Assets for Class Action Settlement

A federal district court judge’s decision a few weeks ago to issue a TRO to enjoin several FINRA arbitrations against Securities America so as to preserve the broker-dealer’s assets to pay a class action settlement reached in the district court has drawn a lot of media coverage. Earlier today, Professor Black posted on the Securities Law Prof Blog a useful summary and analysis of the court’s decision. As Professor Black points out, the decision could severely hamper investors’ ability to recover from a broker-dealer in an individual arbitration if that firm is involved in a related class action litigation.