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July 31, 2004

How Schwab Pros Learn About Rumors' of a Sale

By Staff Reports

Charles Schwab & Co, may soon be another casualty of a rocky market making industry.

Reeling from a tough business in which its stock has lost half of its market value, Charles Schwab is now looking to jettison all its losing units and its capital markets business, according to several recently published reports.

SoundView, a capital markets operation that was melded into Schwab's own capital markets division, is reportedly going to be sold along with the rest of Schwab Capital Markets, which provides market making for some 11,000 Nasdaq and OTC stocks.

The sale would be an embarrassing admission for the giant discount broker. Schwab only acquired SoundView some eight months ago for $321 million. Schwab's plan was to outdo institutional trading rivals by offering research.

A Schwab spokeswoman declined comment. The company's position internally among some front-line trading pros was vague. "We were told the story is only a rumor," one Schwab trader says.