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NYSE Slaps Schwab With $1 Million Fine

This article appears courtesy of Institutional Investor


The New York Stock Exchange says Charles Schwab has agreed to pay a $1 million fine to settle charges that for five years, the discount broker did not properly supervise independent advisers who allegedly had stolen client funds. Although Schwab repaid clients for the missing money, according to USA Today, the NYSE wanted to make a point about the inadequacy of the company's internal systems, which apparently failed to detect the thefts. Schwab reportedly first learned about the stolen funds from clients inquiring about their investments.

"This case is a stern reminder that firms must have adequate procedures to supervise and control transfers of assets from customer accounts," Susan Merrill, enforcement chief at the NYSE, told USA Today.

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