Contact Information: Contact: Gerald H. Silk Bernstein Litowitz Berger & Grossmann LLP 1285 Avenue of the Americas New York, New York 10019 Tel: 212-554-1400 Email: jerry@blbglaw.com Website: www.blbglaw.com Blair A. Nicholas Bernstein Litowitz Berger & Grossmann LLP 12481 High Bluff Drive Suite 300 Tel: (858) 720-3183 Email: blairn@blbglaw.com Website: www.blbglaw.com
Bernstein Litowitz Berger & Grossmann LLP Subprime Litigation Practice Group Announces Class Action Lawsuit on Behalf of Investors in Schwab YieldPlus Fund
NEW YORK, NY--(Marketwire - April 22, 2008) - The law firm of Bernstein Litowitz Berger &
Grossmann LLP announces the filing of a class action lawsuit on behalf of
investors who purchased Select Shares or Investor Shares of the Charles
Schwab YieldPlus Fund (NASDAQ : SCHW ). Marketed to investors as a
conservative investment, the Fund was pitched to investors as being only
marginally more risky than a money market fund. The Fund purported to
deliver a high return by investing in ultra-short term bonds. The Fund was
sold to investors pursuant to a Prospectus, filed with the SEC, which
promised that the Fund would avoid risk by not investing in illiquid
instruments or by concentrating its investments in any one industry.
In direct violation of the representations to investors, the Fund focused
its investments in high-risk mortgage-backed instruments, including
securities backed by subprime loans. Contrary to its promises of
diversification, the Fund concentrated half of its assets in investments
tied to mortgages. Moreover, approximately 40% of the Fund's assets were
locked into complex instruments such as Collateralized Mortgage Obligations
and Collateralized Debt Obligations that were not liquid, and which the
Fund could not readily sell. When the U.S. mortgage market collapsed, the
Fund's investments in these risky instruments plummeted in value. By March
20, 2008, the Fund's assets had declined to approximately $2.5 billion from
a high of over $13.0 billion as of May 30, 2007.
The complaint filed by Bernstein Litowitz on behalf of all investors in the
YieldPlus Fund asserts that Charles Schwab Corp., Charles Schwab Management
and other Charles Schwab entities, together with several individuals
employed by those entities, violated the Securities Act of 1933 by
registering and selling the Select and Investor Shares of the Fund pursuant
to registration statements and prospectuses that contained untrue
information about the Fund, its investments and its risk profile. The
claim is asserted on behalf of all purchasers of Investor and Select Shares
of the Fund between March 17, 2005 and March 28, 2008. A copy of the
complaint can be found at www.blbglaw.com.
Bernstein Litowitz, one of the nation's leading firms representing
plaintiffs in securities and other complex class action litigation, has
offices in New York City, San Diego, New Jersey and New Orleans and is
active in major litigations pending in federal and state courts throughout
the United States. Bernstein Litowitz is responsible for billions of
dollars in aggregate recoveries on behalf of defrauded investors and
consumers, including the more than $6 billion recovered for investors in
the WorldCom, Inc. securities litigation.
In December 2007, Bernstein Litowitz established a new practice group to
protect the interests of its investor and consumer clients in the wake of
the collapse of the subprime mortgage industry and the continuing
revelations of misconduct by mortgage lenders, bankers and rating agencies.
The Firm's Subprime Litigation Practice Group handles the full range of
litigation matters related to the subprime collapse, including claims on
behalf of investors in mortgage lenders, companies in related industries,
and financial institutions that have concealed their exposure to losses
from mortgage-backed securities, as well as investors in CDOs and other
financial instruments tied to mortgage-backed securities. The Subprime
Litigation Practice Group is currently representing investors in a number
of companies involved in subprime lending and investments, including New
Century Financial Corporation, Countrywide Financial, Accredited Home
Lenders Holding Company, Fremont General Corporation, American Home
Mortgage Investment Corporation, Citigroup Inc., and Washington Mutual,
Inc. The Firm is also prosecuting the first case asserted on behalf of
retirees whose retirement savings were improperly -- and imprudently --
invested in high-risk mortgage-backed securities, in an ERISA class action
recently filed against State Street Bank & Trust Company and State Street
Global Advisors.
Please refer to the website of Bernstein Litowitz (www.blbglaw.com) for
more detailed information about the firm and its major achievements in
complex litigation matters. If you wish to discuss the Schwab YieldPlus
Fund case with us, offer any information to assist in the case, or have any
questions, please contact Gerald H. Silk or Blair A. Nicholas.