Investor Sues Both Schwab and Hightower Over Pledged Asset Line

Posted on June 9th, 2025 at 11:53 AM
Investor Sues Both Schwab and Hightower Over Pledged Asset Line

From the desk of Jim Eccleston at Eccleston Law

A retiree has filed a lawsuit accusing Charles Schwab & Co. and Hightower Advisors of financial elder abuse, fraud, and breach of fiduciary duty. ThinkAdvisor reports that the complaint alleges the firms drained over $422,000 from his retirement portfolio through unauthorized trades, misrepresentations, and unsuitable investment strategies.

The investor claims Schwab and Hightower exposed him to excessive risk by concentrating his portfolio and using margin leverage without proper oversight. The lawsuit contends the firms misrepresented a high-risk pledged asset line, functionally a margin loan, as a safe credit line. The investor now faces the imminent forced liquidation of his remaining retirement assets, with only a narrow financial buffer preventing a margin call.

According to the complaint, the investor transferred over $856,000 from JPMorgan Chase to Schwab in 2021, making clear to his Schwab senior financial consultant that these were retirement funds to be managed conservatively. The Schwab consultant then referred the investor to Hightower.

The investor granted Hightower limited trading authority, allegedly relying on sample portfolio performance materials. The investor now claims the trades were unauthorized.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law

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