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December 21, 2009

Attention Schwab Yield Plus Investors: Deadline for Opting Out of Class Action So You Can File Your Own FINRA Arbitration Claim is December 28

One of the leading private advocacy groups in the country is urging investors who lost money in the Charles Schwab YieldPlus funds to opt out of the class action lawsuit so they can file individual arbitration claims. The Wall Street Fraud Watchdog sees no reason why you should accept up to 20 cents on the dollar when you can get back more with an individual claim filed with the Financial Industry Regulatory Authority. The deadline for opting out is Monday, December 28, 2009.

Investors that may qualify as class members acquired Schwab YieldPlus Fund shares between May 31, 2006 and March 17, 2008. In California, residents who held shares from this fund beginning September 1, 2006 also are part of this class action.

Like the Wall Street Fraud Watchdog, our stockbroker fraud lawyers believe it is unfair that investors should get so little back for so much investment. Shepherd Smith Edwards and Kantas, LLP represents investors throughout the US who suffered financial losses from investing in Schwab YieldPlus funds. Investors say they were deceived about the risks involved when the funds allegedly were marketed and sold as cash alternatives. Investors also have accused Schwab of leaving out key information in the YieldPlus funds disclosure and registration statements. Schwab denies the allegations.

Even with the holiday season in full swing, now is NOT the time to delay opting out of the class action complaint. You don't want to give up your right to file a private FINRA arbitration claim. Submit a statement asking that you be excluded from the class-action lawsuit, date and sign your request, and mail by the due date:

Notice Administrator
Re: Schwab Corp. Secs. Litigation Exclusions
c/o Gilardi & Co. LLC
P.O. Box 808061

To find out about filing your individual FINRA arbitration claim, contact our investment fraud law firm and request your free case evaluation.

Related Web Resources:
The Wall Street Watchdog Urges Investors with Schwab Yield Plus to Opt Out of the Class Action Before 12-28-09, PR Web, December 21, 2009

Wall Street Fraud WatchDog

FINRA

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October 13, 2009

Notice: Schwab YieldPlus Investors Must Act Quickly To File Independent Claims For Losses

Investors who invested into YieldPlus Funds issued by the Charles Schwab Corp. must take immediate action to avoid being limited in recovery to the amount obtained through a class action suit. Many with significant losses have been advised by attorneys to seek individual recovery in Securities Arbitration through the Financial Industry Regulatory Authority (FINRA). Those with smaller losses are being advised to remain in the class action.

Most investors who seek recovery of investment losses through private claims receive a greater portion of their losses than those who remain in class actions, even after paying expenses including legal fees. In some cases investors can recover many times the amount paid through class action settlements.

To file a private claim a YieldPlus investor must “opt out” of the class on or before December 28, 2009. This requires the investor to provide a written statement requesting exclusion from the Schwab YieldPlus class-action lawsuit, sign and date the request, include their mailing address and mail this information by the due date. It is highly recommended that this be done earlier than that date and on a form provided by the Administrator. Any flaw in the process can result in a failure to be eligible to proceed.

Allegations regarding the Schwab YieldPlus funds include that investors were deceived about the inherent risk in the funds, which were packaged and sold as cash alternatives. Instead, it is claimed, the YieldPlus funds were invested into high risk mortgages and mortgage derivatives. Investors also claim the funds' registration and disclosure statements omitted material information and facts about the investments, including that the investments were speculative, illiquid, and that the value of the underlying investments were inflated. Schwab has denied all these allegations.

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October 14, 2008

FINRA Orders Charles Schwab to Pay $542,340 Over Short-Term Bond Fund Investor Claim

Earlier this month, a Financial Industry Regulatory Authority panel found Charles Schwab Corp. liable for $542,340 in an investor claim against the company over its YieldPlus short-term bond fund. This case is one of numerous individual arbitration and class action lawsuits against the San Francisco-based investment firm because of the fund.

The Schwab YieldPlus Fund had assets worth over $13 billion last year, but the fund suffered major losses this year because of mortgage-backed securities. At the end of last week, the fund’s assets were worth $432 million.

In this latest arbitration claim, investor Jeffrey Nielson accused Schwab and representative Darin Beckering of purposely misleading him when he purchased the ultrashort-bond fund because they did not fully disclose the extent to which the fund would be exposed to the subprime-mortgage market. Nielson also claims he was never informed that the Schwab YieldPlus Fund was a proprietary fund.

The fund has experienced a more than 30% drop this year. In another claim against Schwab related to its short-term-bond fund, the firm was ordered to pay $18,425 for losses. The YieldPlus Fund has resulted in a $16 million charge for the firm this year because of client complaints and arbitration claims.

Shepherd Smith Edwards & Kantas, LLP is a stockbroker fraud law firm that represents numerous clients with claims against Schwab related to the misrepresentation of its YieldPlus Fund. Its founder, Securities Fraud Attorney William Shepherd says the firm is in talks with dozens of other investors who purchased Schwab YieldPlus shares.

Related Web Resources:

Bond fund costs Schwab more than $500,000, InvestmentNews.com, October 10, 2008

Schwab YieldPlus Fund, Schwab.com

Financial Industry Regulatory Authority

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April 15, 2008

Schwab YieldPlus Fund Investors File Securities Class Action Lawsuit Alleging Marketing Misrepresentation in Funds’ Offering Documents

A class action law suit has been filed on behalf of those who bought Schwab YieldPlus Investor Funds Investor Shares and Schwab YieldPlus Funds Select Shares against the Schwab Corporation, the underwriter and investment adviser connected to the funds, and several Schwab officers and directors. However, many smart investors are instead seeking greater recovery by filing their own cases.

The investor plaintiffs in the class action claim the defendants misled them when they provided false statements about the funds’ lack of diversification and the degree to which the funds were exposed to subprime-backed securities. The plaintiffs say that the funds—marketed as a safe alternative to money market funds—actually had more than half of its fund assets invested in the mortgage industry.

The funds are down significantly. Through March 26, The Schwab YieldPlus Investor Fund (SWYPX) has fallen 17% , while the Schwab California Tax-Free YieldPlus Fund (SWYCX) has dropped by 9% . Investors say that the defendants were in violation of Section 11 of the Securities Act of 1933 when they misrepresented the funds to investors, marketing them with the goal of looking for high current income coupled with minimum share price changes.

Anxious investors left the Schwab YieldPlus Investor Fund when it dropped by about 3.6% in 2007. Fund assets reportedly fell from $13.5 billion in June 2007 to $2.5 billion last month. Fund managers must now sell bonds at depressed rates.

The Schwab California Tax-Free YieldPlus Fund (SWYCX)’s assets are down from $1.1 billion in mid-2007 to under $600 million this March. The source of the significant drop is attributed to its investments in variable-rate bonds connected to the London Interbank Offering Rate (LIBOR) index, which has fallen as liquidity has disappeared.

While the class action suit may result in some recovery for victims, many investors are aware that such cases often result in recovery of only "pennies on the dollar" for investors. Thus, those with any significant loss may obtain a far better result by filing their own claims in securities arbitration.

The investor fraud law firm of Shepherd Smith and Edwards represents investor clients that have lost money because those in the securities industry have engaged in misrepresentation, omissions, unsuitability, overconcentration, churning, failure to supervise, failure to execute trades, breach of promise/contract, breach of fiduciary duty, negligence, margin account abuse, registration violations, or unauthorized trading. Contact Shepherd Smith and Edwards for your free consultation to discuss your case.

Related Web Resource:

Schwab YieldPlus Fund

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