July 2, 2018 / 6:15 PM / 3 months ago

UPDATE 2-Schwab to pay fine to settle U.S. charges on suspicious trades

(Adds Schwab comment, details, byline)

By Jonathan Stempel

July 2 (Reuters) - Charles Schwab Corp will pay a $2.8 million civil fine to settle U.S. Securities and Exchange Commission charges it failed to file suspicious activity reports on questionable transactions by 37 investment advisers.

The fine was disclosed in papers filed on Monday with the federal court in San Francisco, where Schwab is based, and requires a judge's approval.

Schwab was accused of violating the federal Bank Secrecy Act by failing to alert regulators to transactions of at least $5,000 that it suspected might be illegal or posed risks to the company or customers.

The SEC said the 37 advisers had overseen at least 6,500 Schwab subaccounts and more than $840 million of customer assets, and were among 83 terminated from Schwab's platform in 2012 and 2013.

Schwab was required to file suspicious activity reports for 47 of the terminated advisers, but filed just 10, the SEC said.

Among the suspect transactions was $295,000 wired to an adviser who soon afterward bought a home for himself, and trades by an adviser who used his clients' passwords instead of his own.

Schwab neither admitted nor denied wrongdoing.

A spokeswoman, Mayura Hooper, said Schwab looks forward to putting the matter behind it, and remains "committed to earning our clients' trust and working diligently to fulfill our compliance responsibilities."

The case is SEC v Charles Schwab & Co, U.S. District Court, Northern District of California, No. 18-03942. (Reporting by Jonathan Stempel in New York Editing by Lisa Shumaker and Leslie Adler)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below