Schwab Escapes Class Action Over Risky Investments

Law360, New York (August 9, 2011, 2:53 PM EDT) -- A California district judge on Monday shut down investment advisory company Northstar Financial Advisors Inc.'s breach of contract class action alleging Schwab Investments cost shareholders tens of millions of dollars by making riskier bets than its investment guidelines allowed.

U.S. District Judge Lucy H. Koh dismissed Northstar's claims with prejudice, saying the company had failed to show that Schwab violated fiduciary duty or breached contract in funneling its investment dollars into unstable collateralized mortgage obligations and that its third amended complaint failed to demonstrate why the...
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