SAN FRANCISCO, Oct. 15, 2008 (GLOBE NEWSWIRE) -- Earlier this month, an arbitration panel of the Financial Industry Regulatory Authority Inc. (FINRA www.finra.org) of New York and Washington D.C. ruled that Charles Schwab & Co. ("Schwab"), based in San Francisco, and one of its representatives were liable for $542,340 in an investor claim against them. The investor alleged that Schwab and the broker misrepresented the Schwab YieldPlus Fund by not disclosing its exposure to the subprime-mortgage market and the fact that it was a proprietary fund. According to FINRA records, another Schwab client also received an award against Schwab over the YieldPlus Fund in another arbitration.
The YieldPlus funds are ultrashort-bond funds that offered preservation of principal along with reasonable returns. These funds, including the Schwab YieldPlus Fund Select Shares (SWYSX), Schwab YieldPlus Funds Investor Shares (SWYPX) and Schwab California Tax Free YieldPlus Fund (SWYCX). Over the last year, these funds have lost between 10% and 30%, despite their representation as alternatives to money market accounts.
There are several individual arbitration claims filed throughout the country, as well as some class actions. Apparently, Schwab recorded a charge of $16 million this year for "individual client complaints and arbitration claims" stemming from their exposure to the YieldPlus Funds.
Shepherd Smith Edwards & Kantas, LLP (www.sseklaw.com) has already filed a number of complaints on behalf of investors in the YieldPlus funds and will continue to file more complaints over the coming months. If you have lost money in any of the YieldPlus funds, one of our attorneys is available to discuss your legal options.
Shepherd Smith Edwards & Kantas LLP has a team of attorneys, consultants and others with more than 100 years of combined experience in the securities industry and in securities law. Since 1990, we have represented thousands of investors nationwide to recover losses. We have represented clients in Federal and state courts and in arbitration through the Financial Industry Regulatory Authority (FINRA), the New York Stock Exchange Inc. (NYSE), the American Arbitration Association (AAA) and in private arbitration actions. Collectively, we have represented clients in more than 1,000 matters in court, arbitration and/or mediation, and our clients have recovered more than $100 million through our assistance in negotiation, mediation, arbitration and litigation.