Charles Schwab

Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services.

History

2023

Dismissal of employees

On November 1, 2023, the largest USA brokerage company Charles Schwab announced a comprehensive reorganization, during which the number of personnel will decrease by about 5-6%. This measure is expected to help reduce costs that are growing in a crisis and high level. inflations

In the summer of 2023, Charles Schwab announced plans for a large-scale restructuring. In addition to laying off employees, it is planned to close some corporate offices. These measures are expected to provide additional annual operating cost savings of at least $500 million. The company did not name the exact number of dismissed employees. As of September 30, 2023, the state of Charles Schwab on a global scale totaled approximately 35.9 thousand people. Thus, work will lose from 1795 to 2154 employees.

Charles Schwab announces comprehensive reorganization

These are difficult but necessary steps to ensure Charles Schwab remains highly competitive and effective in the long run. This solution affects many talented professionals, whom we treat with care and understanding. Out of respect for our employees and in connection with the ongoing reorganization process, we will refrain from commenting further, "the company said in a statement.

Charles Schwab's restructuring costs are estimated at $400- $500 million. These funds will go, among other things, to severance pay and other payments to dismissed employees. It is noted that the reductions affect mainly those structures that are not related to customer service. At the same time, the layoffs affected the entire organization, including employees of retirement age. The company also closed offices in five cities - Atlanta, San Antonio, San Diego, St. Louis and Tampa^[1]

Charge of attempted domain name reuptake

The US National Arbitration Forum issued a verdict on the complaint filed by Charles Schwab Corporation, a financial and brokerage corporation. This was reported on January 25, 2023 in the "Coordination Center for Domains.RU/.RF" with reference to the resource Domain Name Wire.

Financial giant Charles Schwab Corporation has been accused of trying to take back the domain
Photo: chronicle.com

The complaint was filed against the schwabfinancialcare.com domain, and at first glance, the plaintiff had every chance of winning. The domain name also contains the surname Schwab - it was worn by the founder of the company, and the word financial - an indication of the key area of ​ ​ its activities. In addition, Charles Schwab Corporation, a financial giant with tens of billions of dollars in turnover, did not skimp on lawyers: the company's interests were represented by lawyers from the solid firm Holland & Hart LLP.

However, all this was not enough to succeed. During the proceedings, it was established that the domain registrar was named Simon Schwab. And the site created on the domain offers small (up to 50 thousand dollars) loans to small businesses. Thus, both domain registration and its use are quite legitimate and do not infringe on the interests of the Charles Schwab Corporation.

Moreover, the panel of arbitrators was very annoyed by the fact that the complaint of Charles Schwab Corporation contained clearly inaccurate information. In particular, it stated that the surname Schwab is not the real surname of the registrant, and the schwabfinancialcare.com domain is allegedly not active. Both claims had no basis.

As a result, the panel of arbitrators not only dismissed the complaint, but also found the Charles Schwab Corporation guilty of attempting to re-acquire the domain name.^[2]

2022: $187 million payout for stupid robot consultants that caused investors to lose money

In mid-June 2022, the American brokerage Charles Schwab agreed to pay $187 million to settle accusations by the US Securities and Exchange Commission that employees misled customers about commissions for stupid robot consultants, due to which investors lost money.

The U.S. Securities and Exchange Commission (SEC) contends that from March 2015 to November 2018, Charles Schwab stated that the amount of cash in robo-advisor portfolios was determined through a disciplined portfolio-building methodology, and that the robo-advisor would seek optimal returns.

American brokerage Charles Schwab will pay $187 million for stupid robot consultants that caused investors to lose money

In reality, however, Charles Schwab's own data showed that in most market conditions, cash in portfolios would result in customers making less money, even taking on the same amount of risk. Charles The company advertised the robo-consultant as having neither advisory nor hidden fees, but did not tell clients that cash negatively affected their investments. Charles Schwab made money from the distribution of cash in robo-advisor portfolios by directing it to its affiliated bank, lending, and then holding the difference between interest received on loans and interest paid to robo-advisor clients.

Charles Schwab argued that the amount of cash in its robo-advisor portfolios was determined by complex economic algorithms designed to optimize customer returns, while in fact it was determined by how much money the company wanted to make, said Gurbir Grewal, director of enforcement at the US Securities and Exchange Commission.

Without acknowledging or denying the SEC's findings, three subsidiaries of investment advisers Charles Schwab agreed to the cease and desist order, which required them to pay about $52 million in damages and pre-trial interest, as well as a civil fine of $135 million.^[3]

Notes