Charles Schwab Charitable Investing Arm Hit With Class Suit (1)

Charles Schwab Corp. and its $15 billion charitable investing platform engage in self-dealing by steering money earmarked for charitable donations into poorly performing mutual funds that pay high fees to Schwab, according to a proposed class action filed in the U.S. District Court for the Northern District of California.

The lawsuit, filed Oct. 30 by Schwab Charitable Fund account holder Philip Pinkert, claims Schwab Corp. improperly profits off the independent charitable investing platform that uses its trademarks and has overlapping leadership. This “close relationship” between the entities allows Schwab Corp. to maximize profits by inducing the charitable platform to make ...