In a potentially precedent-setting case, the U.S. District Court for Southern California handed down a legal victory for Waddell & Reed upholding the firm's classification of its brokers as independent contractors, ruling against brokers claiming they should be regarded as employees.

The California court granted Waddell's motion for two summary judgments, but allowed the two former broker plaintiffs to add a third broker to their suit. That new broker now has 30 days to amend the complaint.

The decision has potentially far-reaching consequences for broker-dealers because the plaintiffs specifically alleged that SEC and FINRA regulations with which Waddell & Reed was legally bound to comply—matters such as how a broker can advertise, what his business card says and how to treat e-mail—indicated the sort of control found in an employee relationship.