State of Florida Fines Schwab $1.1 Million
In a Final Order dated March 26, 2012, the Florida Office of Financial Regulation (“OFR”) fined Charles Schwab & Co., Inc. (“Schwab”) $1.1 million for distributing inaccurate information to Florida investors.
In May 2010, OFR commenced an administrative examination of Schwab based upon a complaint received from a Florida investor. According to OFR, it found that from 2008 to 2011, Schwab distributed trade confirmations to Florida investors containing inaccurate information regarding certain preferred equity securities, municipal bonds and corporate bonds. OFR also concluded that Schwab’s supervisory procedures were lacking.
OFR’s examination revealed that the incorrect information distributed included the issuer’s credit rating, call features, maturity dates, coupon rate, survivor option and Schwab’s role as a dealer in some transactions. According to OFR, Schwab typically sent customers who received incorrect confirmations a letter identifying the inaccurate information and providing the accurate information. In addition, OFR concluded that the distribution of incorrect information on the trade confirmations was the result of data processing errors and operational deficiencies within Schwab.
In addition to the $1.1 million fine, Schwab is required to submit a corrective action plan that includes amended operational and supervisory procedures to correct the deficiencies identified by the OFR examination. According to the Final Order, the Florida customers who received confirmations containing inaccurate information will also be offered the opportunity to rescind those transactions.
The Florida securities lawyers at Rabin Kammerer Johnson represent investors nationwide in FINRA arbitration matters. Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at Rabin Kammerer Johnson for a free and confidential consultation by calling toll free at 877.915.4040.