in september 1975, schwab opened its first branch in sacramento, california. it expanded across the state and cut its expenses by very heavy emphasis on automation. in 1981, bank of america offered schwab $53 million in stock for his 37 percent ownership. he sold, but remained as president of a semi-autonomous unit. at this point the unit had annual sales of $41 million, 600 employees, and 220,000 customers through 40 branches. expansion was rapid, reaching 1.6 million customers in 1986, with sales of $308 million. bank of america, however, had its own separate severe problems, and its stock plunged. the sec investigated charles schwab on the possibility he was selling stock to take advantage of insider information; he denied it, and no charges were filed. tensions between the schwab unit and bank of america escalated until 1987, when the deal was cut for schwab to buy back the brokerage company for $230 million. schwab took the firm public. in 1988, however, the company was forced to rebate $2 million to customers whose funds had been illegally used.