Schwab shares web site crashes

By Simon English

CHARLES SCHWAB, Britain's biggest internet stockbroker, suffered an emergency yesterday when a "power surge" blew out the company's electronic channels and crashed its Web and phone dealing operations.

The debacle left Schwab's 160,000 customers unable to either buy or sell between noon and the market close. Callers to the phone line were told: "Due to an emergency, we are unable to gain access to our offices at present. We apologise to all our customers for the inconvenience caused by factors beyond our control."

This latest incident will add to watchdogs' concern about the volumes of business from private investors flooding through the internet and brokers' ability to cope with demand.

The Financial Services Authority has been particularly concerned that investors may not be able to get through to sell shares in the event of a market crash, leading to a meltdown in their assets.

Charles Schwab said yesterday that it would not compensate customers who have missed out through being unable either to sell a stock that fell or to buy one that rose. It has recruited more people to deal with the boom in business and says "call waiting" time is now down to three minutes from 15 minutes a month ago.

A spokesman blamed the failure yesterday on a "power surge" but said it was not connected with the volume of business it is dealing with. About 60,000 of its 160,000 UK customers trade online.

Before Christmas, some stockbrokers were refusing to open new accounts, admitting that they could not service existing customers properly.

http://www.telegraph.co.uk/et?ac=000122257519214&rtmo=pbNSp4Ue&atmo=rrrrrrfs&pg=/et/00/3/7/cnsch07.html

-- Carl Jenkins (Somewherepress@aol.com), March 07, 2000

Answers

Here, the recent crash is not blamed on a power surge but a software glitch:

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Schwab goes down for second time in month

By Greg Sandoval, Staff Writer, CNET News.com

March 8, 2000, 2:30 p.m. PT A software glitch brought down Schwab's Web site and automated telephone service for an hour this morning, preventing customers from making trades, the company said.

The outage, which began at 9:25 a.m. EST, lasted until technicians replaced a recently installed piece of software, a Schwab representative said. The systems failure forced customers to make trades either by calling a Schwab representative or physically going to the company's nearest brick-and-mortar branch, Schwab spokesman Greg Gable said.

The rush of phone calls to speak to Schwab employees quickly swamped telephone operators, he added.

"When people can't access the Web, there typically is a wait and getting through might be more difficult," Gable said.

Schwab will waive $500 in commissions for customers forced to make a trade at one of the company's physical locations, he said.

This is the second time the site has collapsed in less than a month. On Feb. 18, the site barred customers from trading for about 30 minutes. That outage was also blamed on a software problem. That problem was not related to the latest system error, the company said.

While site outages have become commonplace for many of the top e- commerce sites, which must handle sporadic spikes in traffic, few industries are as pained by site malfunctions as online trading.

Last year, many of the top trading firms, including E*Trade and Ameritrade, suffered high profile outages. Some customers claimed they lost money because they couldn't make important trades.

One E*Trade customer filed a lawsuit last year after the Internet brokerage crashed four times.

"Whenever somebody has difficulty getting to their account, that can cause frustration," Gable said.

http://news.cnet.com/news/0-1007-200-1567367.html?tag=st

-- Lee Maloney (leemaloney@hotmail.com), March 11, 2000.

Mid-February's outage when Schwab suspected a software glitch:

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Brief outage hits Charles Schwab site By Reuters, Special to CNET News.com

February 18, 2000, 3:55 p.m. PT

NEW YORK--Charles Schwab's Web site suffered a brief outage this afternoon, preventing customers of the discount brokerage from funneling stock orders through the Internet for 30 minutes. A software error probably caused the problem, a representative said, adding that Schwab was still investigating. The outage was not brought about by computer hackers purposely sabotaging the site, the representative said.

U.S. and Canadian law enforcement agencies have been looking for the hackers whom they say briefly closed some of the Internet's most popular sites last week, including those of Yahoo and Schwab rival E*Trade Group.

"We experienced a problem with our electronic channels," the Schwab representative said. "We switched over to a backup system, and some customers would have experienced a problem accessing our electronic systems when we made that transition."

San Francisco-based Schwab is investigating the root cause of the problem, the representative said, declining further comment.

The Schwab outage lasted from 10:45 a.m. to 11:15 a.m. PST, the representative said, but customers could still place stock orders by calling one of Schwab's brokers.

The outage coincided with computer problems at the technical center of the Nasdaq Stock Market. As a result, the Nasdaq could not update its composite index, which functions as a barometer for technology stocks.

Online brokers faced many outages last year. Most firms, including Schwab, beefed up their sites' capacities and added backup systems.

http://news.cnet.com/news/0-1007-200- 1554038.html?tag=st.ne.1007-203-1567367

-- Lee Maloney (leemaloney@hotmail.com), March 11, 2000.