Reserve Yield Plus Fund Investors Remain In The Dark
Investors with holdings in several funds managed by the Reserve Management Company continue to wait for answers as to when they can access their money. In September, assets in the $1 billion Reserve Yield Plus Fund - which is not a money market fund but apparently was represented as one, according to investors - fell to 97 cents for each dollar, causing the fund’s management to begin liquidation plans. Since then, Reserve Management has yet to provide concrete details on exactly when investors will receive their money in the fund.
Angry investors are posting their experiences regarding the Reserve Yield Plus Fund and the Reserve Primary Fund, also managed by Reserve Management, debacles on Internet message boards in droves. Many are like that of an Oct. 18, 2008, posting from Benny, who said:
“In March, I went to TD Ameritrade and asked the “adviser” for a safe money market fund to invest in while waiting for stock markets to rise. I was directed to the Reserve Yield Plus Fund and put my life savings in it. Now, TDAmeritrade claims the fund is not a money market fund like the Reserve Primary Fund and that it is my own fault for investing in it. Attempts to contact Reserve Management have proven fruitless. My funds are being held hostage and so am I.”
At least nine lawsuits have been filed against the Reserve Management Company and its president and founder of money-market funds, Bruce Bent. Among the charges, investors claim Reserve Management misled investors about the kind of investments made by the funds. And, in the case of the Reserve Primary Fund, investors say several executives from Reserve Management secretly tipped off at least two dozen large institutional investors about the fund’s pending losses and that the news would soon go public. When those investors subsequently pulled out more than half of the fund’s assets, losses for investors who remained in the fund became even worse. Instead of a 1% loss, it rose to 3%.
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