OptionsExpress shareholders on Schwab deal: Not so fast

Say discount brokerage buying company on the cheap; three separate lawsuits filed

Mar 23, 2011 @ 12:26 pm

OptionsXpress Holdings Inc. investors filed three lawsuits challenging Charles Schwab Corp.'s plan to buy the retail options brokerage for about $1 billion in stock, claiming the board failed to get the best possible price.

The trio of lawsuits, filed yesterday and today in Illinois state court in Chicago, where OptionsXpress is based, claim the company's directors breached their fiduciary duties to shareholders. Each complaint seeks a court order blocking the transaction.

Schwab, the largest independent broker by client assets, announced the deal in a statement jointly issued yesterday by the San Francisco-based company and OptionsXpress.

The agreed-upon $17.91-a-share value of the transaction “substantially undervalues the company and is merely an attempt by Schwab to acquire OptionsXpress for a bargain during a temporary downturn in the economy,” according to one complaint. OptionsXpress closed March 18 at $15.33 in Nasdaq Stock Market trading.

The plaintiffs in each case seek class-action, or group, status on behalf of all OptionsXpress investors who were allegedly harmed in the transaction.

Named as defendants in each of the complaints are OptionsXpress Chairman and co-founder James A. Gray, Vice- Chairman and co-founder Ned W. Bennett, and six other directors. Schwab, too, is a defendant in each case.

Greg Gable, a spokesman for Schwab, said it was against company policy to discuss pending litigation and declined to comment. Patrick Van De Wille, an outside spokesman for OptionsXpress, didn't immediately reply to after-hours voice- mail and e-mail messages seeking comment.

--Bloomberg News--

0
Comments

What do you think?

View comments

Most watched

INTV

Young advisers envision a radically different business in five years

Fintech and sustainable investing are two factors being watched closely by some of the 2019 class of InvestmentNews' 40 Under 40.

INTV

Young professionals see lots of opportunity to reinvent the advice experience

Members of the 2019 InvestmentNews class of 40 Under 40 have strategies to overcome the challenges of being young in a mature industry.

Latest news & opinion

New Jersey fiduciary rule: Pressure leads to public hearing, comment deadline extension

Industry push results in chance to air grievances on July 17 and another month to present objections.

InvestmentNews' 2019 class of 40 Under 40

Our 40 Under 40 project, now in its sixth year, highlights young talent in the financial advice industry. These individuals illustrate the tremendous potential of those coming up in the profession. These stories will surprise, entertain, educate and inspire.

Galvin to propose fiduciary rule for Massachusetts brokers

The secretary of the commonwealth is proposing a fiduciary standard in response to an SEC investment-advice rule he views as too weak.

Summer reading recommendations from financial advisers

Here are some books that will keep you informed and entertained during summer's downtime

4 strategies for Roth conversions

There's never been a better time to do a Roth conversion, and here are several ways to go about it.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print