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Charles Schwab Self-Dealing Case

A lawsuit has been filed against Charles Schwab Corporation’s 401(k) fiduciaries, claiming breach of fiduciary duties as the Plan included primarily proprietary funds and affiliated Schwab services, affording economic gain for the firm at the expense of the plan participants. The lawsuit claims that fiduciaries did not perform adequate due diligence concerning the prudence of Schwab services and whether or not comparable non-proprietary funds would be “more appropriate, cost effective or better performing.” The Schwab S&P 500 Index Fund was particularly mentioned, with a 3 to 5 basis point differential verses other S&P 500 Funds available in the marketplace.; January 23, 2017.