Schwab Ordered to Pay $1.34M Over Okcoin Dispute
A FINRA Dispute Resolutions Services panel has ordered Charles Schwab & Co. Inc. to pay nearly $1.34 million in compensatory damages over a dispute involving wire transfers from an elderly client's account to the cryptocurrency Okcoin.
The Morthland family trust, which includes the clients affected by this issue, sued Schwab in 2024, claiming negligence, breach of contract, violations of FINRA rules and breach of fiduciary duty. Two arbitrators concurred on the decision while one dissented.
'It was a third party scam,' said Scott Greco, attorney for the Morthland family. 'Three wire transfers were made from the Schwab trust account, and we argued that Schwab failed to safeguard the assets of customers and act on signs of senior exploitation.'
A Schwab spokesperson stated that they empathize with the claimants but disagree with the decision, saying it disregarded basic legal principles.