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  • brightreflection Apr 26, 2008 2:17 PM Flag


    I have just received a "Settlement Agreement" offer from Schwab for an amount just under 10% of the loss to my account. I would like to know of similar offers that have been received and of the reactions to these offers. I am planning to discuss this offer with an attorney but I do feel that this offer is indicative of weakness in the Schwab case. Seems that a significantly improved final settlement can be attained.

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    • I just got an offer equal to 5 cents on the dollar. I told them to screw. $2,500 on a $48K loss. Hopefully something will come out of the class action

    • All individuals trying to decide between Schwab offers, class action participation or FINRA arbitration should take a look at this report.

      It pretty much tells the story re settlements and awards through binding arbitration.

    • I did not take the offer and am considering options. I thought Schwab's position on their so-called ultra-short bond fund was unteneable, i.e., I was expecting a better offer. They had transripts of my communications with Schwab's fixed income specialist recommending that I move my cash into SWYSX as it was a safe investment with a higer return than a money market. But, the offer was only 2%.

    • To 'konserve'........did you accept their 2% offer? If not, what are your next steps.....arbitration? class action? other?

    • The offer amount are wide ranging. I received an offer that was approximaly 2% of my loses with were a bit over $100k, taking into account dividend.

      I would probably have taken a 15% customer service settlement as I the probability of doing better in class action or in Aribration is small.

    • Thanks brightreflections. The offers may be related to the size of your accounts at Schwab. They were careful to say it was because they valued our relationship, nothing about the fund. I recently got a slightly higher offer at about 15% We have been at Schwab for about 20 years and have in excess of 5 million between several accounts. Anyone else get an offer who will share? I will likely take it as with legal fees, or arbitration I will come out worse.

      • 2 Replies to theatregoingmom
      • Did you purchase SWYSX on the advice of your broker OR were you "self-directed"? What were your dollar losses? Mine were extravagant - in the six figures and NO offer made (since I ws "self-directed". This after four weeks of "investigation" by the "Client Advocacy Group". Closing out one's accounts is pretty thin gruel to make up for such stunning losses from a "minimal risk" vehicle.

      • In response to theatregoingmom.....I had 2 conversations with the client advocacy group regarding my expectations for a fair and reasonable settlement. Two weeks ago I was told I would receive a settlement offer in 3 to 4 weeks so I am still waiting to hear. I find it interesting reading the postings on this message board that there has been a range of settlement percentages that Schwab is offering different clients. How can Schwab defend that? I too have suffered significant losses and have multiple Schwab accounts totaling a quite sizeable amount. I have told Schwab that if I am not offered a fair settlement I will close out all my Schwab accounts. It will be interesting....

    • I have just been informed by my "Client Advocate" that (and I paraphrase here) "Schwab can offer no relief since your account was self-directed". My losses are VERY significant both in percentage and in absolute dollars.

      • 3 Replies to tonycmo
      • How do you obtain a "client advocate"?

      • >I have just been informed by my "Client Advocate" that (and I paraphrase here) "Schwab can offer no relief since your account was self-directed"<

        Interesting, since "advisors" probably don't know any more than is alreay published on Schwab's web site. I assume they will rely on their general web site disclaimers for anyone who didn't use an advisor. So they will try to settle with something less than $.10 on the dollar for those who used the advisors and hang tough in their negotiations with our lawyers for everyone else.

        Since there is a good chance that, if this goes to court, Schwab will prevail, and in any event, our lawyers won't pay for a trial, I expect that the ultimate settlement will be quite small, especially in relation to the legal fees.

      • I have been advised that they would not offer any settlement on my losses. They specifically want to know if you received advice from their advisor staff. If you were self directed or used only Schwab online info, they appear not to offer any settlement. Does anyone have an idea of the loss amounts that would make arbitration vs. class action a better choice?

    • I beleived I had a very strong position with tapes with Fixed Income Advisors and a loss that was not devastating, but large enough to merit attention. Their offer was 2% and was not to imply any thing was wrong at all, only to try to keep me as a valued customer. This also came with an agreement that had to be signed saying that no other action could be taken on this matter. I declined.

      This was a while back, I wonder if their offers are getting better?

    • 10% settlement????? That's clearly a low ball offer. Attorneys are indicating that the FINRA arbitration process will net more even after the they take their share. I am awaiting my settlement offer from the Schwab advocacy team....if they offer 10% I don't know whether I will laugh or be angry.

      • 2 Replies to sgillinois
      • Most offers from Swhab have been well under 10% -- more on the order of 1 to 2%. If I were offered 10%, I would take it as that is likely a better bet than going FINRA or class action.

      • >>Attorneys are indicating that the FINRA arbitration process will net more even after the they take their share. <<
        Sad to say, most of those bottom feeders would "indicate" anything necessary to generate a fat fee for themselves. I sure *hope* that a FINRA settlement or a sweetened offer from Schwab would pay us chumps something for being swindled. However, a lawyer's blandishments are not especially convincing.

    • Was your Settlement Agreement offer unsolicited or had you been speaking with Schwab?

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