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Charles Schwab meant to send a client $82.56. Instead, it transferred $1.2 million. Now it’s suing to get the money back.

Charles Schwab meant to send a client $82.56. Instead, it transferred $1.2 million. Now it’s suing to get the money back.

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Schwab drops stock trading commissions as fee war escalates

FILE - This July 14, 2010, file photo, shows a Charles Schwab office in Oakland, Calif. Charles Schwab is dropping commissions for online trading of U.S. stocks and exchange-traded funds, the latest slash in an industry battle that’s drastically cut the cost of investing. The announcement on Tuesday, Oct. 1, 2019, sent shares of other brokerages plummeting. (AP Photo/Paul Sakuma, File)

NEW YORK — Charles Schwab Corp. is suing one of its former customers after the retail brokerage allegedly sent more than $1.2 million to an account of the Louisiana woman and then could not get the money back.

Schwab meant to send $82.56 to Kelyn Spadoni’s Fidelity Brokerage Services account in February, but a computer glitch caused it to erroneously transfer more than $1.2 million, according to the lawsuit.

Schwab tried to get the money back, but repeated calls and texts to Spadoni, who lives in a suburb of New Orleans, were not returned, the brokerage said in the lawsuit.

“We are fully cooperating with authorities in an effort to resolve this issue,” Schwab said in a statement on Tuesday. Fidelity declined comment.

After receiving the money in her account, Spadoni transferred a quarter of the money to another account, after which she bought a house and a car using the funds, Jefferson Parish Sheriff’s Office spokesman Captain Jason Rivarde said in an interview on Tuesday.

“Obviously you are not planning to give the money back if you spent it,” he said.

When Spadoni signed up with Schwab in January, the agreement she signed included a section that said any overpayment of funds must be returned, said the lawsuit, filed March 30.

Schwab filed a complaint on April 6, said Rivarde. Spadoni was arrested on April 7 and charged with bank fraud, illegal transmission of monetary funds and theft greater than $25,000. She was released from jail on April 8 after posting a $150,000 bond, Rivarde said.

Most of the money has been recovered.

A message by Reuters to a number listed as belonging to Spadoni was not immediately returned. Attempts by other media outlets to reach Spadoni also went unanswered. Rivarde said he did not have contact information for Spadoni or any attorney associated with her.

Some media reports likened the case to Citigroup Inc.’s botched Revlon Inc. payment, when the bank mistakenly sent a group of Revlon lenders $504 million. A judge in February said the asset managers could keep the funds because they were paid the money they were owed, and there was a “strong presumption” they were free to use it.

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