Charles Schwab cash sweep settlement (2022)
Charles Schwab agreed to pay $187 million to resolve claims over its cash sweep program, which paid customers low rates on uninvested balances while the firm earned higher yields on the money.
The settlement became the industry's benchmark for cash sweep penalties.
It signaled to brokerages that regulators and customers would demand market-rate interest on idle cash once rates began rising.
Schwab's payment set the enforcement precedent that Merrill Lynch's $39 million deal and the SEC's $25 million penalty follow.
