Charles Schwab's client portals suffer system-wide outage

Brokerage claims that technical issues were not caused by volume or external factors, and the problem was fixed in time for market open

Aug 28, 2015 @ 10:19 am

By Alessandra Malito

Charles Schwab & Co.'s system-wide client platforms, including its trading system StreetSmart Edge and robo-adviser Schwab Intelligent Portfolios, were not available to customers for more than an hour this morning as the firm experienced technical difficulties.

The brokerage did not make any announcement about its outage at the time it was occurring, except to respond via Twitter to concerned customers who tweeted that they could not log in to their accounts. Schwab responded with a hotline number for urgent trading matters, though customers complained on Twitter that there was a long wait time or they couldn't get anyone on the phone at all.

The problem had been resolved in time for the market opening.

Greg Gable, a Schwab spokesman, would not specify what the issue was, only saying that the company was "experiencing technical difficulties online this morning due to internal technical issues."

He added that the problem was unrelated to volume or any other external factors.

Many customers flocked to Twitter to complain or simply to find out what was happening.

Bill Singer, a New York-based attorney focused on the financial-services industry, said that there could have been major consequences to Schwab's online glitch, especially since the company did not notify its customers via email or immediately post an alert about the issue on its website.

Mr. Gable said that there was an urgent notification on its website, though an arjuna-design reporter did not see any notification of the “technical difficulties” before the issue had been resolved.

"If the firm has been hacked then they have a better defense because they were victimized by a crime," Mr. Singer said. "But if it was software failure … they could be facing serious liability."

The Securities and Exchange Commission declined to comment, while the Financial Industry Regulatory Authority Inc. did not respond by press time.

Mr. Singer noted that a similar occurrence happened in April 2013, when the company's website was experiencing intermittent access problems following a cyberattack. No client data or accounts were compromised.

Firms' account logins have been under fire recently. One whistleblower said Vanguard Group's account sign in credentials were insecure, and others have cited Schwab with the same issues.

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