Retail investors are waiting for class-action lawsuit payouts over cash sweeps. Wells Fargo and LPL avoided fiduciary duty breach claims, but litigation persists against Raymond James, Charles Schwab, and others. Brokerages face scrutiny over cash positioning and rates, eroding client trust.

Cash sweep programs face lawsuits and SEC investigations, with Morgan Stanley’s program under scrutiny. Revenues in these accounts exceeded $8 billion in 2023. Merrill Lynch and Wells Fargo firms fined by SEC in January. Sweeps cost investors millions over the years, with firms profiting significantly.

Cash sweep programs move uninvested cash into interest-bearing accounts unless clients opt out. Clients typically hold cash in bank accounts for safety. Brokerages profit significantly from sweeps. Holding cash in bank accounts is safer than using brokered cash sweeps, according to experts.

Read more at Yahoo Finance: Where Are Cash Sweep Lawsuits Now?