Wolf Popper LLP
Schwab Total Bond Market Fund (SWLBX;SCHW)
Wolf Popper LLP is co-lead counsel in a class action lawsuit against Schwab Investments on behalf of investors in the Schwab Total Bond Market Fund (SWLBX). The action is pending in the United States District Court for the Northern District of California (Civil Action No. C 08 4119).
The action alleges that Schwab caused the Bond Fund to deviate from its stated investment objective to track the Lehman Bros. bond index 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 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 district court, in a February 2009 order, sustained plaintiff’s claims under Section 13(a) of the Investment Company Act. The Ninth Circuit heard oral argument in April 2010 on the defendants’ appeal from the district court’s order, and the parties are awaiting a decision. The Firm attorneys principally responsible for this case are Robert Kornreich and Robert Finkel.
