Charles Schwab Faces Multiple Lawsuits Alleging Elder Fraud Neglect

Posted on November 11th, 2024 at 2:45 PM
Charles Schwab Faces Multiple Lawsuits Alleging Elder Fraud Neglect

From the desk of Jim Eccleston at Eccleston Law

Charles Schwab and its affiliates are under scrutiny after recent lawsuits allege the firm failed to prevent scammers from defrauding elderly clients. According to Financial Planning, an elderly couple claims Schwab allowed fraudsters to drain nearly $30 million from their accounts, transferring funds to a cryptocurrency exchange through Bank of America. According to the lawsuit, scammers converted $18.5 million into cryptocurrency, leaving it unrecoverable.

This case follows similar allegations from recent months. In one instance, a 92-year-old client lost $278,000. Another case saw a FINRA arbitration panel fine TD Ameritrade, now owned by Schwab, $100,000 for allowing a similar fraud. All three cases followed a pattern where scammers posed as financial institution representatives or law enforcement, tricking clients into transferring assets under the guise of protecting their accounts.

Financial Planning reports that a Schwab spokesperson expressed sympathy for the clients but contended that all transfers were client-authorized. That defense may or may not succeed as the cases are fact-specific and Schwab will be held to its customer protection, operations, compliance, and supervisory procedures.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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