"Schwab would like everyone to think it doesn't have conflicts, but that's not totally true, " says Douglas Schulz, author of Brokerage Fraud and a plaintiffs' witness in securities trials.

FORBES: Holier Than Whom?

As such, the Respondents may have taken the position that Medical Capital perpetrated a fraud on the market as a whole, and that the brokerage firm and its registered person were similarly duped by the falsehoods and misrepresentations.

FORBES: Public Customer Wins Medical Capital Notes Arbitration

It was that fraud that led Congress to authorize the oversight board to review audits of brokerage firms in the first place.

FORBES: The Bean Counters Look the Other Way at Fraud