NOTE: Wow, who knew deliquent loans would be bad investment? What do you think?
Class Action Suit Filed Against Charles Schwab Over Mortgage Backed Securities | LoanSafe.org: "“We intend to prove that Charles Schwab caused investors to suffer losses when it began investing in volatile, high-risk mortgage-backed securities without informing shareholders or seeking shareholder approval through a vote, which the company was obligated to do, according to the fund’s prospectus,” Hagens Berman Managing Partner and plaintiffs’ attorney Steve Berman said.
The plaintiffs contend that the fund deviated from its stated investment objective by investing a material percentage of its portfolio in high-risk, non-agency collateralized mortgage obligations, or CMOs, which were not part of the Lehman Bros. U.S. Aggregate Bond Index, according to the complaint.
Plaintiffs attorneys also contend that the fund deviated from its stated fundamental investment objective by investing more than 25 percent of its total assets in non-agency mortgage-backed securities and CMOs, the suit alleges.
Schwab’s deviation from the fund’s primary investment objective led to tens of millions of dollars in shareholder losses due to a long-term decline in the value of non-agency mortgage-backed securities, the lawsuit contends."
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