The U.S. Securities and Exchange Commission sued Charles Schwab Corp. over claims that the company failed to file reports on suspicious transactions by independent investment advisers that Schwab terminated from its platform.
The lawsuit, filed Monday in San Francisco federal court, claims Schwab’s adviser services division failed to file suspicious activity reports, or SARs, in 2012 and 2013. The advisers are independent and contract with Schwab and provide investment advice, according to the complaint. They aren’t employees of Schwab or affiliated with the financial-services firm.
A representative of San Francisco-based Schwab wasn’t immediately able to comment.
In those two years, Schwab terminated its business relationship with 83 advisers, with a combined total of $1.62 billion in assets under management and almost 18,000 accounts, according to the complaint. Schwab concluded they had violated its internal policies and presented risk to the firm. At least 47 of those engaged in transactions that Schwab had reason to suspect were suspicious, according to the complaint.
The case is U.S. Securities and Exchange Commission v. Charles Schwab, No. 18-cv-3942, U.S. District Court for the Northern District of California (San Francisco).
This article was provided by Bloomberg News.