NEW YORK, April 14, 2009 (GLOBE NEWSWIRE) -- On April 14, 2009, Napoli Bern Ripka, LLP filed yet another FINRA arbitration against Charles Schwab for fraudulently soliciting investors in their YieldPlus Funds. The FINRA Statement of Claim alleges damages for breach of fiduciary duty, unsuitability, misrepresentations and omissions relating to the Schwab's failure to properly disclose the risks associated with the YieldPlus Select Fund (SWYSX).
Claimants, a retired couple, alleged that Charles Schwab represented that the YieldPlus Funds were a safe and conservative alternative to money markets and depository accounts. Schwab specifically stated in its marketing materials that the high ratings of the underlying assets in the funds would minimize share price fluctuations. Matt Hastings, co-manager of YieldPlus Funds, said in a May 2007 interview with Bloomberg TV that, "The investors that we are trying to capture are money fund investors or investors that are defensive on the bond market."
However, Charles Schwab failed to inform investors about the speculative nature of the YieldPlus Funds and failed to tell investors that the investments in the YieldPlus Funds were subject to substantial risk to their principal investment.
On August 20, 2008, Miriam Sjobom, a Morningstar analyst referred to the Fund as "an unmitigated disaster," noting "although it's designed to be one of the more reliable holdings in a portfolio, its sizable stakes in nonagency mortgage- and asset-backed bonds, including some backed by subprime loans, have proved treacherous." Ms. Sjobom suggested that the remaining shareholders flee the Fund because they "won't be able to recoup the majority of the damage." This "unmitigated disaster" was caused by Schwab's over-concentration in highly illiquid and risky assets.
The firm is representing investors on an individual basis, not in a class action. The firm believes in representing those investors that have suffered losses as a result of their YieldPlus investments. Investors can obtain a free legal consultation by contacting Adam J. Gana at (212) 267-3700 x 115. The firm will represent purchasers of the YieldPlus funds regardless of the amount lost (most firms require a minimum loss of $50,000.)
Napoli Bern Ripka, LLP has one of the strongest and brightest securities arbitration departments in the country. The firm welcomes any investors in the YieldPlus Funds (SWYSX or SWYPX) to contact them about their case.