Santa Monica Observer - Community, Diversity, Sustainability and other Overused Words

By David Ganezer
Observer Staff Writer 

Charles Schwab Closes Accounts of "Deplorable" Customers from OptionsXpress Brokerage

One bank purchases a smaller bank, then inexplicably closes some accounts belonging to the old banks customers.


December 8, 2017

Alyssa Campanella Miss USA Alyssa Campanella visits the NYSE in 2011.

A merger dragged Optionsxpress Customers into Charles Schwab Bank last month. They had no choice in the matter, as one bank had purchased a smaller bank. Now, some of the customers dragged kicking and screaming into Schwab, are being evicted with no explanation. Some are in danger of being unbanked, or having their credit diminished through no fault of their own.

Charles Schwab bank, the nation's second largest brokerage, has more than ten million customers. Giant banks like Schwab routinely close accounts of persons they decide are undesirable. However, those customers have usually signed account documents accepting the banks power to close their accounts "for any reason.' OptionsXpress customers signed no documents at Schwab bank, however, so it's unclear that the bank has this authority.

In 2011, Schwab acquired OptionsXpress, an online trading platform, paying $1 billion. The two online platforms operated independently for 6 years, but in October, OptionsXpress customers were migrated over into the Schwab brokerage platform. Schwab opened new accounts for Optionsxpress customers.

Now some are being closed by Schwab, with a letter that explains "it was a business decision." We called Michael, who works at the Bank's "Customer Verification and Research Center." He had no further information, noting that "I just work here."

TD Ameritrade has purchased Scottrade Bank, and intends to merge completely with it in March of 2018. Schwab's latest move calls into question whether they will also rid themselves of "the deplorables," leaving consumers with fewer choices.

The Charles Schwab Corporation is a bank and brokerage firm, based in San Francisco, California. It was founded in 1971 by Charles R. Schwab. It is on the list of largest banks in the United States and is one of the largest brokerage firms in the United States. The company provides services for individuals and institutions that are investing online. The company offers an electronic trading platform for the purchase and sale of financial securities including common stocks, preferred stocks, futures contracts, exchange-traded funds, options, mutual funds, and fixed income investments. It also provides margin lending, and cash management services. The company also provides services through registered investment advisers.

Schwab operates in four main divisions: investing, wealth management, banking, and trading. As of December 31, 2016, the company had 10.155 million active client brokerage accounts, with $2.779 trillion in assets. The company operated 335 branches in 46 states, as well as a branch in each of Puerto Rico and London.

We have reached out to Schwab CEO Walter Bettinger for comment on this story.


Reader Comments(3)

hriff writes:

I traded with OX for a long time, since the start. It was awesome, the trade desk would CALL ME to see how my trading was going. They would answer the phone when I called. After the purchase, customer service went out the window, it was BAD! Then after the platforms merged last year, all of the Charles Schwab system errors and freezes and flat out issues cause me to LOSE A LOT OF MONEY. I called almost daily to figure out why my trades were not executing and they simply said: we have no record of said trades. I started losing hundreds of thousands of dollars because of these glitches. CHARLES SCHWAB DID NOTHING, I closed my account and moved to another platform that I am trying out now. STAY AWAY IT IS TERRIBLE AS BEST. I have zero faith I will ever see a dime back, I even sent a letter to the CEO, nothing, I imagine they would simply discredit my character before they ever did the right thing (why would they, the law says nothing about doing the right thing).

fedup5711 writes:

They promised that they would not eliminate the java based streaming interactive chart system that OPEX had until they had perfected one of their own - they lied the OPEX chart is gone and not only are their charts not interactive they don't even stream. Schwab is pathetic - I will be going elsewhere.

HerrWilli writes:

They seem to be somewhat incompetent. We were getting mail communications with OPEX. Schwab decided to go email without any mail communications with the customer. When it was pointed out by a very close relative. They said they could not reestablish any mail communication without first talking to the client even though they are the ones who broke the existing communication channels. The last mail communication was a statement from OPEX showing a zero balance. Talk about belligerent.


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