United States
Caproasia.com | The leading source of data, research, information & resource for investment managers, professional investors, UHNW & HNW investors, and advisors to institutions, billionaires, UHNWs & HNWs. Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets? Caproasia - Learn more

Media, Events, Networking, Roundtable, Membership - Contact Us

Grow Your Clients, Business & AUM. Start in 24 hours.
List Services: HNW | Private Wealth | Family Office | Investment

This site is for accredited investors, professional investors, investment managers and financial professionals only. You should have assets around $3 million to $300 million or managing $20 million to $3 billion.







United States SEC Charges Charles Schwab Investment Adviser Subsidiaries with $187 Million Settlement, Misrepresents Robo-Advisor Portfolios & Loaned Out Clients Cash 

17th June 2022 | Singapore

The United States SEC (Securities & Exchange Commission) has charged Charles Schwab Investment Adviser Subsidiaries with a $187 million settlement, with Charles Schwab misrepresenting Robo-Advisor Portfolios and loaning out clients’ cash to affiliate banks but keeping the difference (interests) it earned on the loans.  Gurbir S. Grewal, Director of the SEC’s Division of Enforcement: “Schwab claimed that the amount of cash in its robo-adviser portfolios was decided by sophisticated economic algorithms meant to optimize its clients’ returns when in reality it was decided by how much money the company wanted to make. Schwab’s conduct was egregious and today’s action sends a clear message to advisers that they need to be transparent with clients about hidden fees and how such fees affect clients’ returns.”  United States SEC: “According to the SEC’s order, from March 2015 through November 2018, Schwab’s mandated disclosures for its robo-adviser product, Schwab Intelligent Portfolios, stated that the amount of cash in the robo-adviser portfolios was determined through a “disciplined portfolio construction methodology,” and that the robo-adviser would seek “optimal return[s].” In reality, Schwab’s own data showed that under most market conditions, the cash in the portfolios would cause clients to make less money even while taking on the same amount of risk. Schwab advertised the robo-adviser as having neither advisory nor hidden fees, but didn’t tell clients about this cash drag on their investment.  Schwab made money from the cash allocations in the robo-adviser portfolios by sweeping the cash to its affiliate bank, loaning it out, and then keeping the difference between the interest it earned on the loans and what it paid in interest to the robo-adviser clients.”

“ United States SEC Charges Charles Schwab Investment Adviser Subsidiaries with $187 Million Settlement, MisRepresents Robo-Advisor Portfolios & Loaned Out Clients Cash 

 



Web links may be disabled on mobile for security.
Please click on desktop.


Do you manage $20 million to $30 billion?
Advise institutions, billionaires, UHNWs & HNWs?

Subscribe Caproasia
Delivered to your Inbox
Get Ahead in 60 Seconds. Organised for Success.
Join 10,000 + leading financial professionals, investment managers,
professional investors & advisors.
Links: Learn More | UHNW & HNW | Subscribe | Start Today

2022 Summer Subscribe Special | 15th July 2022
$180 Yearly | $380 Yearly (Full Price)
Individual, Team & Corporate Subscription
Email: claire@caproasia.com

Grow Your Clients, Business & AUM. Start in 24 hours.
List Services: HNW | Private Wealth | Family Office | Investment

2021 Data Release
2020 List of Private Banks in Hong Kong
2020 List of Private Banks in Singapore
2020 Top 10 Largest Family Office
2020 Top 10 Largest Multi-Family Offices
2020 Report: Hong Kong Private Banks & Asset Mgmt - $4.49 Trillion
2020 Report: Singapore Asset Mgmt - $3.48 Trillion AUM



United States SEC Statement

United States
United States

Schwab Subsidiaries Misled Robo-Adviser Clients about Absence of Hidden Fees

The Securities and Exchange Commission today charged three Charles Schwab investment adviser subsidiaries for not disclosing that they were allocating client funds in a manner that their own internal analyses showed would be less profitable for their clients under most market conditions. The subsidiaries agreed to pay $187 million to harmed clients to settle the charges.

According to the SEC’s order, from March 2015 through November 2018, Schwab’s mandated disclosures for its robo-adviser product, Schwab Intelligent Portfolios, stated that the amount of cash in the robo-adviser portfolios was determined through a “disciplined portfolio construction methodology,” and that the robo-adviser would seek “optimal return[s].” In reality, Schwab’s own data showed that under most market conditions, the cash in the portfolios would cause clients to make less money even while taking on the same amount of risk. Schwab advertised the robo-adviser as having neither advisory nor hidden fees, but didn’t tell clients about this cash drag on their investment.

Schwab made money from the cash allocations in the robo-adviser portfolios by sweeping the cash to its affiliate bank, loaning it out, and then keeping the difference between the interest it earned on the loans and what it paid in interest to the robo-adviser clients.

“Schwab claimed that the amount of cash in its robo-adviser portfolios was decided by sophisticated economic algorithms meant to optimize its clients’ returns when in reality it was decided by how much money the company wanted to make,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement. “Schwab’s conduct was egregious and today’s action sends a clear message to advisers that they need to be transparent with clients about hidden fees and how such fees affect clients’ returns.”

Without admitting or denying the SEC’s findings, Schwab’s investment adviser subsidiaries, Charles Schwab & Co., Inc., Charles Schwab Investment Advisory, Inc., and Schwab Wealth Investment Advisory, Inc., agreed to a cease-and-desist order prohibiting them from violating the antifraud provisions of the Investment Advisers Act of 1940, censuring them, and requiring them to pay approximately $52 million in disgorgement and prejudgment interest, and a $135 million civil penalty. The subsidiaries also agreed to retain an independent consultant to review their policies and procedures relating to their robo-adviser’s disclosures, advertising, and marketing, and to ensure that they are effectively following those policies and procedures.

The SEC’s investigation was conducted by Ruth Hawley and John Roscigno and supervised by Jeremy Pendrey and Monique C. Winkler of the San Francisco Regional Office, with assistance from Selvin Akkus-Clemens and Dennis Hamilton of the Division of Economic and Risk Analysis. Examinations of the Charles Schwab entities conducted by Samuel Kim, Rhonda Fan, Nadia Brannon, Daniel Peso, and John Chee of the SEC’s Division of Examinations in the San Francisco Regional Office contributed to the investigation.






For CEOs, Heads, Senior Management, Market Heads, Desk Heads, Financial Professionals, Investment Managers, Asset Managers, Fund Managers, Hedge Funds, Boutique Funds, Analysts, Advisors, Wealth Managers, Private Bankers, Family Offices, Investment Bankers, Private Equity, Institutional Investors, Professional Investors

Sign Up / Contact Us

Caproasia | Get Ahead in 60 Seconds. Join 10,000 +


    Mailing List (Free)Subscribe 2022 Summer Promo $180 YearlySubscribe $380 YearlySubscribe $40 MonthlyAssociate Member $380Professional Member $680Executive Member $2,000Corporate Member


    Private WealthFamily OfficePrivate BankingWealth ManagementInvestmentsAlternativesPrivate MarketsCapital MarketsESG & SICEO & EntrepreneursTax, Legal & RisksHNW & UHNWs Insights









    Caproasia | Driving the future of Asia
    a financial information technology co.
    since 2014

    Web links may be disabled on mobile for security.
    Please click on desktop.









    Caproasia.com | The leading financial website for investment managers, professional investors, UHNW & HNW investors and advisors to institutions, billionaires, UHNWs & HNWs.  Covering capital markets, investments and private wealth in Asia. How do you invest $3 million to $300 million? How do you manage $20 million to $3 billion of assets?

    Caproasia is a financial information technology co. founded in 2014. We have 4 businesses in Media, Information, Services and Technology. We created 3 solutions: Membership, Events & Platforms to drive investment decisions in Asia through information, services, technology & people, that impact economies, societies & people. Our Mission: Driving the future of Asia

    For 2022 Investment Day: mail@caproasia.com
    For Family Office, Professional Investor, HNW Investor Events: mail@caproasia.com
    For Membership, Events, Networking, Roundtable, Summits: mail@caproasia.com
    For Investment Relations Network: mail@caproasia.com
    For Platforms, Media Kit, Advertising, Campaigns, Partnerships: angel@caproasia.com
    For press release: press@caproasia.com
    For all other enquiries: mail@caproasia.com



    Caproasia Users
    • Manage $20 million to $3 billion of assets
    • Invest $3 million to $300 million
    • Advise institutions, billionaires, UHNWs & HNWs
    • Learn More | Caproasia Users
    Caproasia Platforms | Join 10,000 Investors & Advisors Monthly Networking & Roundtables: Membership | Join a Powerful Network: Family Office Programs: Caproasia Summits: Special Coverage


    Previous articleSingapore Court Convicts Former CFO of SGX Listed Broadway Industrial Group to 3 Months Jail for Profiting $30,000 for Insider Trading
    Next articleUnited States SEC Requests Public Comments: Are Information Providers Providing Investment Advice Rather than Information?
    Caproasia.com covering capital markets, investments and private wealth in Asia. Our users manage, advise & invest $25 trillion assets in Asia