A retired biostatistician has accused Charles Schwab & Co. and Hightower Advisors of financial elder abuse, breach of fiduciary duty, fraud and other violations that he alleges drained over $422,000 from his retirement savings during one of the strongest bull markets in history.
Christopher M. Barker, 71, of Napa, California, alleges in a lawsuit filed early this month that “unauthorized trading, misrepresentations, and breaches of fiduciary duty” have caused “devastating losses” to his retirement portfolio and expose him to further depletion.
Schwab and Hightower misrepresented a high-risk margin loan as a safe credit line and executed about $510,000 in unauthorized trades, according to the lawsuit, filed in California Superior Court in Sacramento.
The complaint, which also names a Hightower investment advisor, a Schwab senior financial consultant and 50 unnamed “Does” as defendants, contends the firms failed to monitor the portfolio properly, allowing it to decline about 50% while the market rose 20%.
The firms and other defendants also exposed Barker, who has a Ph.D., to excessive risk through concentrated positions and margin leverage, the lawsuit alleges.
Due to the alleged misconduct, Barker “now faces the imminent forced liquidation of his remaining retirement assets due to a predatory 'pledged asset line' that functions exactly like a margin loan but which Defendants explicitly misrepresented as ‘not a margin loan,” the complaint contends.
“As of April 13, 2025, Plaintiff's account has only a $3,889.65 buffer before forced liquidation could be triggered — a buffer so small that even a minor market decline of approximately 1.5% would cause a margin call and the liquidation of his retirement savings,” it says.
Barker transferred over $856,000 to Schwab from JPMorgan Chase in 2021, explicitly telling the Schwab senior financial consultant named in the case, Daryl Powell, that these were retirement funds “and needed to be managed conservatively,” the complaint states. (He had deposited about $2.3 million at JPMorgan after selling his home, the lawsuit says.)
Powell recommended that Barker work with Hightower advisor Steve Durk, a defendent in the case, for investment management but didn’t disclose that Durk was formerly employed at Schwab, creating what the plaintiff calls an undisclosed conflict of interest.
Based on the recommendation, and on sample portfolio performance documents that Durk presented, Barker signed a Limited Power of Attorney allowing the advisor to make trades in his Schwab account, according to the suit. Durk operates as a managing director at Hightower affiliate Frontier Investment Management Co., according to the complaint, and is listed as a partner on Frontier’s website.
Within the first month of managing Barker’s account, in September 2021, Durk sold about $210,000 in assets without the client’s knowledge or consent, triggering substantial capital gains tax liabilities that the retiree specifically wanted to avoid, the lawsuit alleges. In 2022, he sold another $300,000 in assets, again without Barker’s knowledge or consent, it says.
“Plaintiff did not discover these unauthorized sales until he was preparing his tax returns, as he never received trade confirmations despite repeatedly requesting them,” Barker alleges. He cannot transfer his assets to another brokerage firm because of the pledged asset line restrictions placed on his account by the defendants, the lawsuit contends.
Among other points, Barker alleges the firms breached their fiduciary duty by recommending high-risk strategies inappropriate for a 71-year-old retiree with explicitly stated conservative investment objectives; failing to follow modern portfolio theory principles as advertised and promised; withholding trade confirmations despite his repeated requests; and placing their interests above his financial welfare.
Barker noted he needs the funds to help his son, who is undergoing cancer treatments, and that several family members have developed Alzheimer's disease.
In addition to financial elder abuse and breach of fiduciary duty, Barker alleges professional negligence, fraud and negligent misrepresentation, unfair business practices, conversion, and breach of written contract. He seeks special, triple and punitive damages, among other costs.
An earlier customer complaint, cited on Powell’s Financial Industry Regulatory Authority BrokerCheck page and matching information in the lawsuit, indicates the client sought $1.5 million in damages. “The firm denies any wrongdoing on the part of the representative and the firm's review of the matter did not identify any sales practice violations,” FINRA noted.
“We empathize with Dr. Barker’s situation and his dispute with his independent financial advisors. Our role is to offer financial solutions — supported by transparent communication and clear disclosures — so clients can make informed decisions aligned with their financial goals,” a Schwab spokesperson told ThinkAdvisor by email Wednesday, speaking for the firm and financial consultant Powell.
Hightower Advisors and its employees do not comment on pending litigation, a spokesperson told ThinkAdvisor by email Wednesday.
Schwab’s Pledged Asset Line, which involves a high risk level, allows clients to borrow against their non-retirement assets without having to liquidate their investments, according to the company’s website.
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