Court Asks Schwab Fund Plaintiff To Revise Complaint

Court Asks Schwab Fund Plaintiff To Revise Complaint - 2/20/2009

Home

Index of Filings

News and Press Releases

Filings

Decisions

Settlements

Litigation Activity Indices

Top Ten List

Annual/Quarterly Updates

Clearinghouse Research

Articles & Papers

Search

Related Sites

About Us

Local Rules

Sponsors

Register

_______________
Copyright © 2001
Stanford Law School

2009 News and Press Releases

SEARCH

News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

DISMISSAL NEWS:

Court Asks Schwab Fund Plaintiff To Revise Complaint
Jacqueline Bell

Securities Law 360. February 20, 2009
_________________________________________________________________________

EXCERPT: In a class action launched by an investment advisory firm against Charles Schwab & Co. Inc. over the investment strategy of one of its bond funds, a judge has granted Schwab’s motion to dismiss for lack of standing, but has granted Northstar Financial Advisors Inc. leave to amend its complaint. Judge Susan Illston of the U.S. District Court for the Northern District of California issued a ruling Thursday, saying that since Northstar never owned shares of the bond fund itself, but only bought shares for clients, it lacked standing to purse its claims, but that the firm could easily fix the complaint’s problems. Citing a 2008 Second Circuit decision in W.R. Huff Asset Management Co. LLC v. Deloitte & Touche LLP, the court agreed that Northstar could not bring claims on behalf of its clients simply because it is an investment adviser. “The assignment of claims from one of Northstar’s clients would, however, cure this deficiency,” Judge Illston noted. Northstar filed the class action lawsuit in August 2008 on behalf of all those who owned shares of the Schwab Total Bond Market Fund from Aug. 31, 2007, to the present, alleging that the fund illegally deviated from its stated investment strategy by investing heavily in mortgage-backed securities, in violation of Section 13(a) of the Investment Company Act of 1940. … The case is Northstar Financial Advisors Inc. v. Schwab Investments et al filed in the U.S. District Court for the Northern District of California, case number 3:08-cv-04119.

Back to News page | Back to Archived News 2009 page | Back to Top

�