FDD Items 3 & 4 · 2026 filing

Charles Schwab litigation history

What Charles Schwab disclosed about lawsuits, arbitrations and bankruptcy in the 2026 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.

Items 3 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 10; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: None stated

Bankruptcy (Item 4): None; Franchisor, parent, predecessor or officer

Filing year: 2026; Disclosures cover the prior ten years

Extracted from the 2026 Franchise Disclosure Document

Item 3: litigation

Regulatory actions and civil litigation including SEC, FINRA, CBOE, and state regulatory settlements primarily involving brokerage regulatory compliance, order routing, and trade reporting. Two pending FINRA arbitrations involve former franchisees disputing franchise agreement termination/non-renewal (Weltz 2025, Dissel 2025). Largest settlement was SEC 2022: ~$52M disgorgement plus $135M civil penalty for robo-advisor disclosure issues.

Item 3 (litigation) · 10 matters disclosed · 3 pending listed

Litigation cases

The franchisor

Pending (2)

Charles Schwab & Co., Inc. v. Louis Dissel
pending
Brought against a franchisee · filed 2025-08-27 · FINRA Dispute Resolution · 25-01812; 25-01814
“FINRA Dispute Resolution, Charles Schwab & Co., Inc. v. Louis Dissel, Case Nos: 25-01812; 25-01814 Schwab filed a FINRA arbitration on August 27, 2025 against Louis Dissel, a former Schwab franchisee.”Page 27 of the 2026 FDD, Item 3
Weltz v. Charles Schwab & Co., Inc.
pending
Brought by a franchisee · filed 2025-08-05 · FINRA Dispute Resolution · 25-01600
“FINRA Dispute Resolution, Weltz v. Charles Schwab & Co., Inc., Case No: 25-01600 Claimant Andrew Weltz, a former Schwab franchisee, filed a FINRA arbitration against Schwab on August 5, 2025.”Page 27 of the 2026 FDD, Item 3

Concluded (6)

SEC, In the Matter of Charles Schwab & Co., Inc., Charles Schwab Investment Advisory, Inc., and Schwab Wealth Investment Advisory, Inc.
concluded
Government or regulatory action · filed 2022-06-13 · U.S. Securities and Exchange Commission
“… On June 13, 2022, the SEC alleged that, from March 2015 through November 2018, Schwab’s mandated disclosures for its”Page 25 of the 2026 FDD, Item 3
The Nasdaq Stock Market LLC, Charles Schwab & Co., Inc.
concluded
Government or regulatory action · filed 2020-05-26 · The Nasdaq Stock Market LLC · 2015044918101
“… File No. 2015044918101 (Acceptance, Waiver and Consent (“AWC”) entered May 26, 2020) Nasdaq alleged that Schwab’s controls for orders directly routed to Nasdaq and for orders routed to other”Page 25 of the 2026 FDD, Item 3
Chicago Board Options Exchange, Business Conduct Committee, In the Matter of Charles Schwab & Co., Inc.
concluded
Government or regulatory action · filed 2018-08-30 · Chicago Board Options Exchange, Business Conduct Committee · 18-0014
“… File No. 18-0014 (Order entered August 30, 2018) CBOE Exchange claimed that, between January 2010 through December 2016, Charles Schwab & Co., Inc.”Page 26 of the 2026 FDD, Item 3
Securities and Exchange Commission v. Charles Schwab & Co.
concluded
Government or regulatory action · filed 2018-07-09 · U.S. District Court, N.D. Cal. · 18-cv- 3942
“… N.D. Cal., Case No. 18-cv- 3942 (Resolved on July 9, 2018) Pursuant to a consent executed by Charles Schwab & Co., Inc. and filed with the federal district court on July 9, 2018, Schwab consented to”Page 26 of the 2026 FDD, Item 3
FINRA, Department of Market Regulation, In the Matter of Charles Schwab & Co., Inc.
concluded
Government or regulatory action · filed 2017-10-16 · FINRA, Department of Market Regulation · 20160487988- 01
“… File No. 20160487988- 01 (AWC entered Oct. 16, 2017) Schwab entered into a settlement with FINRA regarding its failure to timely report eligible securitized transactions to”Page 26 of the 2026 FDD, Item 3
Texas State Securities Board, In the Matter of the Dealer Registration of Charles Schwab & Co., Inc.
concluded
Government or regulatory action · filed 2016-09-22 · Texas State Securities Board · IC-CAF-16
“… Order No. IC-CAF-16 (Consent Order entered September 22, 2016) Schwab entered into a consent order with the Texas State Securities Board (“Board”) in which it”Page 26 of the 2026 FDD, Item 3

Status not stated in the filing (1)

Robert Crago, et al. v. Charles Schwab & Co., Inc., et al.
Brought by a third party · filed 2016-07-13 · U.S. District Court, N.D. Cal. · 16-cv-03938- RS
“… N.D. Cal., Case No. 16-cv-03938- RS On July 13, 2016, a securities class action lawsuit was filed in the U.S. District Court for the Northern District of California on behalf of a putative class of customers executing equity orders through Schwab.”Page 27 of the 2026 FDD, Item 3

Parent, affiliates, master franchisor and subfranchisor

Pending (1)

Corrente Antitrust Litigation
pending
Brought by a third party · The Charles Schwab Corporation (CSC, our parent) · filed 2022-06-06 · U.S. District Court for the Eastern District of Texas
“… On June 6, 2022, the Company was sued in the U.S. District Court for the Eastern District of Texas on behalf of a putative class of customers who purchased or sold securities through CS&Co or TD Ameritrade, Inc. (now part of Charles Schwab & Co., Inc.) from October 26, 2020 to the present.”Page 25 of the 2026 FDD, Item 3
Outcome: “The court granted final approval of the settlement on November 24, 2025 and certain objectors to the settlement have appealed the decision to the Fifth Circuit Court of Appeals.”

Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.

Disclosure signals that moved the score

How this shows up in the verdict

Multiple regulatory settlements (SEC, FINRA, state securities boards) and class action litigation signal compliance and operational risks that franchisees inherit
Documented arbitrations with former franchisees regarding termination/non-renewal suggest contentious franchisor-franchisee relationships

The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.

Before you weigh a lawsuit

How to read Item 3

A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.

Questions worth asking current and former franchisees, using the contact list in Item 20:

Were you, or anyone you know in the system, party to a dispute with the franchisor?
Was it resolved by settlement, arbitration or a court, and on what terms?
Has the number of disputes gone up or down since you signed?

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