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.