A participant in the Charles Schwab Corp. 401(k) plan has sued the plan and corporate executives, claiming they violated their duties under the Employee Retirement Income Security Act (ERISA) by offering Schwab funds that were “more expensive than comparable alternatives available in the marketplace.”

The suit was filed in United States District Court in San Francisco on January 19, 2017. It claimed that executives breached their fiduciary duties, stating they “imprudently and disloyally larded the plan with unnecessary, expensive and poorly performing investment products and services.” The suit is currently seeking to be certified as a class-action suit.


Plaintiff Christopher Severson, a participant in the SchwabPlan Retirement Savings and Investment Plan, asserted in his complaint that offering Charles Schwab products and services enabled the company to reap “significant fees and profits at the expense of the plan and its participants.” The complaint claims that Schwab included among the plan’s investment options certain mutual funds and collective trusts that were affiliated with Schwab, which allowed Schwab and its subsidiaries to collect unreasonable and excessive fees from its employees’ retirement savings. The complaint further alleges that Schwab imposed improper charges through a self-directed brokerage program, and used for its own purposes unallocated cash belonging to the 401(k) plan.

The plan had $2.93 billion in assets at the close of 2015, according to the company’s latest Form 5500 filing.

If you or someone you know has lost money as a result of a retirement plan, investment, or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.