Supreme Court Rejects Charles Schwab Appeal

Posted on November 5th, 2015 at 5:04 PM
Supreme Court Rejects Charles Schwab Appeal

From the Desk of Jim Eccleston at Eccleston Law LLC:

The United States Supreme Court recently upheld a decision to allow Northstar Financial Advisors Inc. to sue Charles Schwab on behalf of its investor-clients. In a ruling by the 9th U.S. Circuit Court of Appeals, Northstar was given the right to sue Charles Schwab for breach of contract. The appellate court decision explained that the fund’s fundamental policies were sufficient to form a binding contract.

Schwab allegedly deviated from the explicit objectives of a mutual fund sold to investors. The objective of the fund was to track the Lehman Brothers U.S. Aggregate Bond Index and thereby avoid big industry bets. Schwab portfolio managers allegedly invested over 25% of assets in mortgage securities and collateralized mortgage obligations. During the relevant period, the fund lost 4.80% while the index rose 7.85%.

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services.

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