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Schwab, Creative Planning Sued Over $9.5M Loss

By Melanie Waddell

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Charles Schwab and Creative Planning are being sued for alleged negligence tied to account management involving the loss of 45,695 shares of Boeing stock valued at about $9.5 million.

According to the suit, filed on Aug. 25 in New Jersey Superior Court for Bergen County, Bruce Bilow contends that Creative “acted negligently and breached the standard of due care” in connection with its supervision of Bilow’s investment strategy and its implementation.

Schwab acted as the custodian of the brokerage accounts opened for and on behalf of Bilow’s accounts.

According to the suit, the two registered advisors handling Bilow’s accounts were Phillip Attebery, who is also an Accredited Investment Fiduciary with Creative, and Brendon Hanna, also the Director of Complex Strategies, “and a purported and alleged expert in connection with options trading investment strategies.”

Prior to June, 2016, Bilow had inherited 45,695 Boeing shares of stock from his father, “which collateralized a $2 Million … account loan, and were used as the underlying security at risk from the aggressive options trading strategy recommended and implemented by Attebery,” the suit states.

At this time, Bilow had advised Attebery and Hanna “that he absolutely did not want to sell any of the Boeing stock, and Attebery assured him that the Boeing Stock would never be at risk,” according to the suit.

In response thereto, Attebery “recommended and implemented an aggressive options investment strategy with respect to the Boeing stock which he represented to the Plaintiff: (a) was extremely safe; (b) would generate income; (c) would assist the Plaintiff in paying down his margin loan; and (d) would preserve the Boeing stock,” the suit continues.

According to the suit, “…this reckless and negligent stock options investment strategy ultimately led to the sale and loss of all of the Plaintiff’s Boeing stock.”

Schwab and Creative Planning did not respond to a request for comment.

(Credit: Bloomberg)

Melanie Waddell

@Think_MelanieW

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