ATLANTA, June 16, 2008 (PRIME NEWSWIRE) -- The law firms of Page Perry, LLC (Atlanta), Maddox, Hargett & Caruso, P.C., (Indianapolis and New York City), Aidikoff, Uhl & Bakhtiari (Los Angeles) and David P. Meyer & Associates (Columbus, Ohio) (www.subprimelosses.com) announce the filing of two more arbitration claims against Charles Schwab (SCHW) based on its inappropriate marketing and management of the Schwab YieldPlus Investor Shares (SWYPX) and its Schwab YieldPlus Fund Select Shares (SWYSX) (the "YieldPlus Funds" or "Funds"). The group anticipates the filing of dozens of additional Schwab YieldPlus claims in the next few weeks.
The claims are based on the allegations that Charles Schwab omitted to disclose or misrepresented important information to investors regarding the YieldPlus Funds' safety, composition and risk level. While marketing the YieldPlus Funds, Schwab acknowledged that "the investors we are trying to capture are money market investors or investors that are defensive on the bond market." In so doing, Schwab routinely mischaracterized the Schwab YieldPlus Funds as safe conservative investments. In its written materials regarding the YieldPlus Funds, Schwab misrepresented that the Funds offered:
Increased yield potential-Ultrashort bond funds like the Schwab YieldPlus Funds have historically provided higher sustained yields versus money market funds, as their short duration helps minimize exposure to falling bond prices as rates rise. Even though the share price may fluctuate minimally, these funds offer lower risk than longer-term bond funds and only marginally higher risk than money market funds.
Schwab also emphasized that the safety of the YieldPlus Funds was enhanced by the short duration of holdings in its portfolio even though this was not accurate.
The brokers who sold the Schwab Yield Plus Funds are not targets of our investor claims, according to Page Perry, LLC. "Our investigation has indicated that Schwab deceived its own brokers about the YieldPlus Funds" said attorney J. Boyd Page of Page Perry, LLC. "We believe that there are an array of alternatives open to investors seeking recovery of the losses which they sustained in these Funds. Investors should be aware of the pending class actions involving the YieldPlus Funds. Investors also have the right to pursue individual claims on their own behalf. The class case has certain limitations that investors need to be aware of in selecting a course of action. While the class may be appropriate for certain investors, many investors would be better served by filing individual arbitrations."
Important Facts to Consider Prior to Joining A Schwab Yield Plus Class Action
- The pending Schwab Yield Plus class action Class Period is March 17, 2005 to March 17, 2008. Investors who made purchases prior to March 17, 2005 are not represented and will have no right to recovery in the Class Action.
- In the case of Schwab Yield Plus losses, many investors sought safe, liquid, cash investments but were sold a product that was, in reality, much different. Such investors will have viable claims based on the investment's unsuitability. Because a suitability claim is dependent on an individual's circumstances, this claim cannot be prosecuted on a class wide basis.
- Investors with significant losses are unlikely ever to be made whole in a Class Action. Class action representation may be attractive where individual losses are small so that any one investor may not have an economic interest in pursuing the case. However, investors who have lost more than $20,000 should strongly consider pursuing their rights on an individual basis.
- Class actions are filed by attorneys seeking to represent all investors who have suffered a common wrong or purchased the same investment. Classes in securities cases are typically represented by the investor with the largest claim at stake. This often means that state pension funds or institutional investors will choose the attorneys and will be the ones who work on the strategy of the case. The interests of the class representative may not always be aligned with your interest; a specific example of this potential conflict is the inability to pursue suitability claims.
- Class actions sometimes create hurdles to recovery for individual investors including depositions and motion practice which are generally not permitted in securities disputes decided before FINRA. The FINRA arbitration process can be completed in approximately 12 months, recovery through a Schwab Yield Plus class action may take several years.
More information is available at www.subprimelosses.com or by contacting an attorney.