Schwab glitch showed wrong debt prices for one week
Customers of online brokerage Charles Schwab saw incorrect prices for certain debt products on the company's trading platform for about a week, in one of the latest glitches to hit the financial markets.
The glitch, which was less impactful but longer lasting than some of the other trading system glitches that have made headlines recently, apparently occurred when Schwab integrated into its platform a third-party system that provides pricing information on some bonds and other securities.
A spokesman confirmed to the Wall Street Journal that "technical issues" affected "a small subset" of fixed-income instruments, including preferred securities and collateralized mortgage obligations. Municipal bonds were "rarely" impacted, the spokesman told the Wall Street Journal. The issue apparently affected all of the company's electronic platforms according to a company spokeswoman.
"At no time were there issues related to the actual value of the positions or of trades," the spokesman said. "It was a very unfortunate case of displaying the wrong prices to our clients." Customers were not able to trade on the incorrect prices. The firm didn't say how many were affected.
While the problem was occurring, customers using Schwab's trading platform encountered a message saying "holders of some preferred and fixed income securities may be seeing some incorrect values." On Tuesday that message was changed to "a majority of our technical issues around fixed-income securities pricing values have been resolved." The Schwab spokesman confirmed that the issue has been resolved and that the prices are now presenting correctly.
Schwab had nine million active brokerage accounts at the end of last month.
- see this Wall Street Journal article