Charles Schwab’s Total Bond Market Fund Has Become a Focus of Investor Claims


Charles Schwab’s Total Bond Market Fund is the subject of another class action lawsuit against Schwab, according to a September 12 article by Dan Jamieson of InvestmentNews called “Another lawsuit filed over Schwab bond fund. The lawsuit reportedly alleges that, as of May 31, 2007, Schwab misrepresented the fund to investors as tracking the Lehman Brothers U.S. Aggregate Bond Index, which contained 37% mortgage-backed securities, when the fund actually held over 67% in residential-mortgage-backed securities.

The class action was filed September 3 in U.S. District Court for the Northern District of California. A similar suit is pending in federal court in California. Schwab expects these cases to be consolidated, according to the article.

Securities class actions are designed to provide relief to multiple investors who experienced similar misconduct. Such actions are particularly beneficial for investors whose losses are too small to make an individual lawsuit or arbitration claim economically viable. Most claims against brokerage firms like Schwab that are not part of a class action must be brought filed as arbitration claims with the Financial Industry Regulatory Authority (FINRA).

Investors who have suffered significant losses in the Total Bond Market Fund should consult with experienced counsel, who will typically evaluate the potential claim and provide a recommendation as to how best to proceed at no charge. If the recommendation is to file an arbitration claim, such cases are often handled on a contingent fee basis because many clients prefer that arrangement. Hourly or blended arrangements, however, may be appropriate and desirable in other circumstances.

Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing institutional and individual investors with investment problems. Page Perry is investigating potential claims relating to the Schwab Total Bond Market Fund. For further information, please contact us.