Charles Schwab returns to hot seat

CHARLES Schwab is back as chief executive of his namesake investment brokerage after the board forced out his successor.

David Pottruck, who said he accepted 'the board's decision that it's time for me to step aside', is taking the fall for the firm's poor performance and a move from discount brokering to being a full service broker.

The company has been widely criticised for paying $391m (£209m) last year for researcher Soundview Technology.

With Soundview, Schwab chased institutional business and raised commissions. However, when investors refused to bite, it was forced to cut commissions. There have been rumours in the US media that it is already trying to offload Soundview.

There has been little recent enthusiasm for trading stocks among small investors. Consequently, Schwab reported a 26% drop in second-quarter customer trading revenue, which translated into a 10% drop in net income to $113m, compared with $126m last year.