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Charles Schwab Corporation, through affiliates and subsidiaries, may have misled investors in Schwab Total Bond Market Fund.
Investigation Source (Case #08-cv-4119)
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- Investments
- Lehman/Bear Sterns Bankruptcy
- Investment Advisor Duties
- Mutual Funds
Product or Service
- Mutual Funds
Injury Type
- Monetary Loss
Investigation Details
THis is an investigation and pending class action lawsuit against Schwab Investments, Charles Schwab & Co. and Charles Schwab Investment Management ("Charles Schwab") on behalf of investors in the Schwab Total Bond Market Fund (SWLBX).
The class action lawsuit alleges that Charles Schwab stated that the investment objective of the Schwab Total Bond Market Fund was to track the Lehman Brothers U.S. Aggregate Bond Index. The Schwab Total Bond Market Fund may have deviated from its stated investment objective by investing in high risk non-U.S. agency collateralized mortgage obligations ("CMOs").
The non-U.S. agency CMOs were not part of the Lehman Index and were substantially more risky than the U.S. agency securities and other instruments that comprised the Index.
The Fund also deviated from its stated fundamental investment objective by investing more than 25% of its total assets in U.S. agency and non-agency mortgage-backed securities.
The Schwab Total Bond Market Fund's deviation from its stated investment objective caused it to substantially deviate from the Lehman Index and caused substantial injury to its shareholders.
The class action lawsuit alleges that Charles Schwab stated that the investment objective of the Schwab Total Bond Market Fund was to track the Lehman Brothers U.S. Aggregate Bond Index. The Schwab Total Bond Market Fund may have deviated from its stated investment objective by investing in high risk non-U.S. agency collateralized mortgage obligations ("CMOs").
The non-U.S. agency CMOs were not part of the Lehman Index and were substantially more risky than the U.S. agency securities and other instruments that comprised the Index.
The Fund also deviated from its stated fundamental investment objective by investing more than 25% of its total assets in U.S. agency and non-agency mortgage-backed securities.
The Schwab Total Bond Market Fund's deviation from its stated investment objective caused it to substantially deviate from the Lehman Index and caused substantial injury to its shareholders.
Defendant Details
| Name (Stock Symbol) | Brief Description |
|---|---|
| Charles Schwab Corporation, The (SCHW) | The Charles Schwab Corporation provides securities brokerage, banking, and related financial services to individual, institutional, and corporate clients. |