Arnold & Porter Obtains Securities Victory for Charles Schwab

On October 27, 2021, Arnold & Porter secured a significant win on behalf of multinational financial services company Charles Schwab Co. Inc. in the US District Court for the Northern District of California. The opinion denying class certification issued by the court will help advance the law in favor of defendants in future securities cases.

In 2016, a group of Charles Schwab customers filed suit against the company regarding its order routing and order execution. After the customers recently attempted to certify as a class, the court denied class certification of the putative 10b-5 class action, holding that the presumption of reliance relied upon by the plaintiffs in the suit did not apply, which precludes class treatment. The decision relies on recent Ninth Circuit authority and provides guidance for courts looking for an analytical approach to the issue of the presumption of reliance in securities cases alleging both misrepresentation and omissions.

The Arnold & Porter team was led by Securities Enforcement & Litigation senior counsel Gilbert Serota.