MIAMI, April 8, 2009 (GLOBE NEWSWIRE) -- The securities law firm of Dimond Kaplan & Rothstein, P.A. (http://www.dkrpa.com or http://www.investmentfraud-lawyer.com) announced today that it has filed additional FINRA arbitration claims against Charles Schwab & Co., Inc. on behalf of investors who lost hundreds of thousands of dollars in the Schwab YieldPlus fund. The claim alleges causes of action for breach of contract, breach of fiduciary duty, negligence, negligent misrepresentations and omissions, and fraud.
Charles Schwab offered two nearly identical YieldPlus funds, the Schwab YieldPlus - Select Shares (Symbol:SWYSX) and the Schwab YieldPlus - Investor Shares (Symbol:SWYPX). Both funds are from the ultra-short bond fund category. "While the YieldPlus fund was marketed and sold as an alternative to a money market fund or a bank certificate of deposit, the YieldPlus fund actually subjected investors to far greater risk than that of a money market fund or a bank CD," said Dimond Kaplan & Rothstein attorney Jeffrey Kaplan.
The arbitration claims allege that Charles Schwab misrepresented the risks of the YieldPlus fund and failed to disclose important information about the securities held in the fund. Specifically, Charles Schwab marketed the fund as "a safe alternative to money market funds" that would provide "higher potential returns than money market funds, with only marginally higher risk." Notwithstanding those representations, investors have lost approximately $1.3 billion in the YieldPlus funds, with a decrease of approximately 25% during the first quarter of 2008 alone. That performance is far worse than that of money market funds and other ultra-short bond funds during the same period. Among other things, the YieldPlus fund was heavily concentrated in risky mortgage-backed and asset-backed securities and banking- and financial-sector securities, This over-concentration is believed to be a significant cause of the YieldPlus fund's losses.
Dimond Kaplan & Rothstein continues to investigate the YieldPlus fund and expects to file additional cases on behalf of other investors. To date, FINRA arbitrators have decided in favor of three different YieldPlus investors who filed FINRA arbitration claims against Charles Schwab. One investor was awarded $542,340, which was approximately 81% of the claimed damages. Two other smaller cases resulted in awards of 100% of the claimed damages.
Dimond Kaplan & Rothstein, P.A. is an AV-Rated law firm that represents investors nationwide in stockbroker misconduct and investment fraud cases. The firm currently represents dozens of Charles Schwab YieldPlus investors, and has represented investors against most major Wall Street brokerage firms in claims involving stocks, bonds, options, auction rate securities, hedge funds, and mutual funds. If you suffered YieldPlus losses, please contact Jeffrey Kaplan, Esq. of Dimond Kaplan & Rothstein, P.A. at (888) 578-6255 or jkaplan@dkrpa.com for a free case evaluation. You also may visit the firm on the web at www.dkrpa.com or www.investmentfraud-lawyer.com.
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