SEC Mulls Schwab Unit's Naked Short-Sale Sanction Appeal

Law360, New York (January 15, 2016, 10:56 PM EST) -- A Charles Schwab Corp. subsidiary and a former customer told the U.S. Securities and Exchange Commission Friday that an agency judge overreached when she found them liable for an alleged naked short-selling scheme and ordered them to pay $8.2 million in sanctions.

OptionsXpress Inc. and Jonathan Feldman are challenging a June 2013 initial decision by Chief Administrative Law Judge Brenda Murray that found them liable for violations of the SEC's short-selling rules and on the hook for millions of dollars apiece in penalties and repayments.

But the pair argued that OptionsXpress and, in turn Feldman, had received tacit approval from their...

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