The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Schwab Faces a Revived Index Fund Lawsuit Not Rated 0.0 Email Routing List Email & Route  Print Print
Tuesday, March 10, 2015

Schwab Faces a Revived Index Fund Lawsuit

News summary by MFWire's editors

A class-action lawsuit over a Charles Schwab [profile] index mutual fund is back from the dead.

Today the Ninth U.S. Circuit Court of Appeals resurrected Northstar v. Schwab, sending it back to U.S. District Judge Lucy Koh in San Jose, California. Jonathan Stempel of Reuters broke the news.

The fight revolves around the Schwab Total Bond Index Fund. Northstar is an RIA that had clients invested in the fund, and the suit attacks Schwab for deviating from the index fund's benchmark, the Lehman Brothers U.S. Aggregate Bond Index (now rebranded as a Barclays index), by investing more than 25 percent of the fund "in non-agency mortgage securities and collateralized mortgage obligations," Reuters writes. Thus, the complaint goes, the fund's performance suffered from September 1, 2007 through February 27, 2009.

"We are reviewing the opinion and expect to continue to defend the allegations in court," Schwab spokeswoman Sarah Bulgatz tells the wire service.

The plaintiff's appellate victory wasn't unanimous. Two judges voted in favor of the plaintiffs' appeal, yet Judge Carlos Bea voted against the plaintiffs. He argued that Northstar lacks standing as it is Northstar's clients, not Northstar itself, that owned the fund. 

Edited by: Neil Anderson, Managing Editor

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2024: Q3Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use