Arbitration Panel Orders a $2.75 Million Payment in Favor of Charles Schwab
Wednesday, June, 26, 2013
In a case between a financial planner and Charles Schwab regarding accusations of stealing from clients, Matthew Weitzman recently received the news from the arbitration panel that he is responsible for paying $2.75 million. Weitzman used to serve as a principal of AFW Asset Management, based in New York City suburbs.
Weitzman's father in law, Burton Langer, argued that the Schwab Company was responsible for unauthorized securities transfers, alleging damages of $8.4 million in addition to interest and attorney's fees. For independent investment advisers, Schwab maintains a large business in order to supervise those accounts.
An arbitration panel headed by the Financial Industry Regulatory Authority ordered Weitzman to pay damages of $2.75 million total in addition to interest of 9 percent each day until the total award is paid off. Schwab's counterclaim had requested an award in the amount of whatever Weitzman was determined to be liable for. In addition to the claims already on the table, Schwab's representatives alleged that Langer was guilty of breach of contract and aiding and abetting.
FINRA arbitrators are not required to share the reasons for their decisions once a final determination has been made. Weitzman was sentenced to 97 months in prison and ordered to pay his clients a total of $7.1 million, which his former attorney says Weitzman has made payments towards. To date, Schwab has not commented on whether they believe payments towards the award will actually be made on their claim. The money that Weitzman took from his clients was used to fund a lavish lifestyle, until he was caught and sentenced in 2010. Weitzman received the money from clients by generating fake client authorization forms for disbursements, and then told his clients he was investing those proceeds into their accounts. The proceeds never reached the clients.