SSEK Investigating Claims Involving optionsXpress, Inc. and brokersXpress, Inc.
The securities lawyers with Shepherd, Smith, Edwards, & Kantas LLP (“SSEK”) are investigating claims of investors and clients of optionsXpress, Inc. (“optionsXpress”) and brokersXpress, Inc. (“brokersXpress”) who believe their broker or advisor has committed some form of fraud or other misconduct. The attorneys with SSEK have previously represented multiple former clients of optionsXpress, and its affiliate brokersXpress, in lawsuits and/or arbitration claims.
In the roughly 14 years that optionsXpress has been operating as a broker/dealer, it has been the subject of 23 regulatory actions and/or events, and has had a number of arbitration claims filed against it by customers which went through a final determination and award by appointed arbitrators. OptionsXpress has also been disciplined by securities and options trading regulators 11 times between June 2011 and March 2015 alone, resulting in millions of dollars in fines.
Most recently, optionsXpress was disciplined for failing to safeguard client funds and properly review red flags in the face of identity theft . According to FINRA, a client had an account wiped out of over $450,000 by an identity thief who was transferring funds to an outside bank account under the name of someone other than the optionsXpress account holder. FINRA claimed that despite numerous red flags and irregularities, optionsXpress continued to let these transfers continue.
In another instance, optionsXpress was disciplined as a result of an arrangement with a third party “coaching program” that optionsXpress operated with between March 2007 and March 2012. According to FINRA, optionsXpress had the right to control the hiring and training of these investment coaches, but failed to properly do so. As a result, the marketing scripts being used “failed to present a fair and balanced description of the risks and potential benefits of the coaching program” , which was in violation of applicable rules and regulations.
OptionsXpress’s disciplinary history also includes allegations of misconduct by the SEC that it participated in a naked short scam. According to the regulator, optionsXpress was repeatedly taking part in a number of fake “reset” transactions which were intended to mislead anyone looking into believing the firm had actually purchased securities of “like kind and quality,” when it actually did not. The firm was also disciplined for: failing to properly supervise written communications with customers and failing to retain required records ; failing to maintain required balances in its customer reserve bank account; and other reporting failures, among other issues.
OptionsXpress was founded in 2001 and later acquired by Charles Schwab Corporation (“Charles Schwab”) in 2011. As a part of that purchase, Charles Schwab also acquired brokersXpress, which had been a subsidiary. BrokersXpress was then shut down, and clients and brokers of that firm were, in large part, transferred either to optionsXpress or to Charles Schwab advisory services . As a result, some former customers of brokersXpress suffered from similar misconduct to issues occurring with optionsXpress.
If you are or were a customer of optionsXpress or brokersXpress and believe you lost money as a result of fraud or other misconduct related to your accounts or investments there, contact the law firm of Shepherd Smith Edwards & Kantas LLP for an evaluation of your account to determine if you might have a claim to recover some or all of your losses. All communications will be kept strictly confidential, and you will not be billed in any way for a consultation.
Shepherd Smith Edwards & Kantas LLP has a team of attorneys, consultants and staff with more than 100 years of combined experience in the securities industry and in securities law. For more than two decades, our firm has represented thousands of investors throughout the United States, Puerto Rico, and internationally to recover losses suffered through brokerage firms and banks. We have represented clients in Federal and state courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange Inc. (NYSE), the American Arbitration Association (AAA) and in private arbitration actions.