Schwab Claims Broker|Swiped Client Lists

LOS ANGELES (CN) - A Charles Schwab broker swiped hundreds of confidential client records before he left the company, Charles Schwab & Co. claims in court.

The brokerage and banking company sued its former financial consultant Peter Lauer on Aug. 15 in Superior Court, alleging unfair competition, breach of contract and breach of fiduciary duty. Schwab claims the information could be used for "improper purposes," including ID theft.

Lauer told Schwab on June 10 that he was resigning, and his final day of work was July 8, according to the lawsuit.

Lauer was able to get into the company's computer network from his laptop at home, Schwab says. Schwab claims it investigated Lauer's access of the client database in the months before his resignation and discovered some highly unusual activity on May 29.

On that day, it claims, Lauer accessed 220 accounts on the client database known as Client Central. That was 20 times more accounts than on the broker's typical work day.

"One hundred and forty-one (141) of these screens were accessed within a span of less than one hour late at night from a remote location outside of Schwab's office, sometimes at a rate of five per minute," the complaint states.

Schwab says the information on the client screens includes contact information, asset balances, passwords and other confidential information.

"The conduct at issue threatens the privacy interests of hundreds of innocent clients and involves information that could be used for any number of improper purposes, including identity theft," the lawsuit states.

Schwab says it has repeatedly asked Lauer to explain the unusual activity but never got a "straight answer" from the former employee.

It wants an order enjoining Lauer from passing on the confidential client information.

"Schwab is also asking the court to order expedited deposition and document discovery so that the court can fashion a suitable equitable remedy sufficient to protect the interests of the hundreds of innocent consumers whose proprietary information is at stake," the complaint states.

Schwab is represented by Usama Kahf with Fisher & Phillips, of Irvine.

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