The highest court in the land could soon be tackling another mutual fund case, this one about straying from its investment objectives.

On July 27 lawyers for Charles Schwab [profile] filed a 280-page petition for writ of certiorari, asking the nine justices of the Supreme Court of the United States to hear the brokerage giant's appeal of a decision handed down by the 9th Circuit. Lawyers for Northstar Financial Advisors, the RIA who is suing Schwab in the case, filed their 45-page response to the petition on August 26, and the ICI, the Mutual Fund Directors Forum, and Pacific Life's mutual fund arm all filed their own briefs two days later.

The suit involves the Schwab Total Bond Market Fund. In August 2008, Northstar sued Schwab, claiming that the fund deviated too much of its investment objectives by investing too heavily in mortgage-backed securities. A federal district court initially tossed Northstar's suit, but the 9th Circuit revived it and sent it back to the lower court. Now Schwab is calling on SCOTUS to stop the 9th Circuit from reviving the case. 

Edited by: Neil Anderson, Managing Editor


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