Charles Schwab Corporation disclosed that it had processed $27.7 million in transfers linked to Jeffrey Epstein for a palace purchase in Marrakesh between June 26 and July 9, 2019. The firm flagged the activity, reported it to federal authorities via a suspicious activity report, and terminated the associated accounts.
The disclosure follows a broader pattern of regulatory scrutiny for institutions that handled Epstein’s accounts. Deutsche Bank was fined $150 million in 2020 for compliance failures, and Schwab was subpoenaed in 2020 for documents related to Epstein’s estate. Schwab has also faced prior compliance issues, including a 2022 SEC settlement of $187 million for misleading robo‑advisor clients and a 2021 FINRA notice for failing to file SARs for some terminated independent advisors.
Schwab said it will conduct a comprehensive compliance review and implement additional internal controls. The review aims to strengthen anti‑money‑laundering procedures and prevent future lapses, following the firm’s opening of accounts for Epstein’s business entities in April 2019 and the subsequent flagging of the payments.
The event is reputationally sensitive but has not yet had a material impact on Schwab’s financials. The firm reported record Q4 2025 results, with net revenues of $6.3 billion—up 19% year‑over‑year—and adjusted EPS of $1.39, meeting analyst expectations. Total client assets reached $11.9 trillion. The compliance review is expected to add costs but is unlikely to affect the company’s earnings trajectory in the short term.
Investors will likely focus on how the review could influence Schwab’s regulatory risk profile and potential future compliance expenses. While the disclosure does not alter the company’s current earnings outlook, it underscores the importance of robust compliance frameworks in maintaining investor confidence.
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