Schwab ordered to pay clients $1.34 million in crypto dispute involving elderly client.

“It was a third party scam,” said the attorney representing the claimants.

A divided panel of arbitrators under the aegis of FINRA Dispute Resolutions Services on Thursday awarded a client of Charles Schwab & Co. Inc. close to $1.34 million in compensatory damages over a dispute centered on wire transfers from an elderly client’s account to a cryptocurrency, Okcoin.

The clients, the Morthland family trust, sued Schwab in 2024, claiming negligence, breach of contract, violations of FINRA rules and breach of fiduciary duty, according to the FINRA arbitration award, which was dated Thursday.

Two arbitrators concurred on the decision while one dissented.

The causes of action relate to Okcoin cryptocurrency, according to the award. The arbitrators denied legal fees as part of the award.

“It was a third party scam,” said Scott Greco, attorney for the Morthland family. “Three wire transfers were made from the Schwab trust account, and we argued that Schwab failed to safeguard the assets of customer and act on signs of senior exploitation of the clients.”

“We empathize with the claimants, whose father was victimized by unscrupulous criminals,” a Schwab spokesperson wrote in an email. “But we disagree with the decision, which disregarded basic legal principles.”