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Regulation and Compliance > Litigation

Trustee Says Schwab Is Hoarding His Father's Money: Lawsuit

By Dinah Wisenberg Brin

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An Ohio man has sued Charles Schwab & Co., alleging fraud, breach of contract and unjust enrichment over a trust that he says the investment firm has refused to liquidate and transfer.

Richard M. Butler Jr., acting as trustee for the revocable trust that his father established for heirs in 2013, contends he has the legal authority to liquidate and transfer funds from the Schwab investment account.

From February through this month, Butler made several attempts to do so, but Schwab “willfully rejected” those attempts, according to the lawsuit filed May 3, which contends Butler, as trustee, has sustained over $500,000 in damages.

Among other claims, Butler alleges that Schwab and its agents, when promoting their services for the trust, “knowingly made numerous misrepresentations” regarding the investment account and “distorted accessibility of funds from the investment account.”

“Plaintiff’s investment decisions would have been entirely different (if the trust) had been aware of such misrepresentations,” the complaint contends.

Schwab is reviewing the information and had no comment Tuesday, a spokesperson told ThinkAdvisor by email.

Photo: Bloomberg

Dinah Wisenberg Brin

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