Life Partners Sues Schwab Unit Over Naked Short Sales

Law360, Los Angeles (April 15, 2014, 9:19 PM EDT) -- Life Partners Holdings Inc. hit a Charles Schwab Corp. subsidiary with a suit in Illinois court Tuesday, alleging the brokerage, its former chief financial officer and one of its biggest customers created “counterfeit-phantom stock” through their abusive naked short-selling.

Life Partners is basing its allegations on a June U.S. Securities and Exchange Commission ruling that optionsXpress Inc. committed securities fraud by selling hundreds of millions of dollars' worth of phantom stock, including nearly $5.5 million of Life Partners shares.

The suit claims that naked short sales...
To view the full article, register now.

Law360 UK

UK Financial Services

Read Our Latest UK Legal News & Analysis

Financial Services Law360 UK and Insurance Law360 UK provide breaking news and in-depth analysis on U.K. and European Union regulation, enforcement, legislation, and litigation involving banks, investment firms, insurers, and more.