New Twist In Schwab YieldPlus Class Action: Wells Notice Issued To Charles Schwab

Recent news of a Wells Notice issued by the Securities and Exchange Commission (SEC) against Charles Schwab could put pressure on the San Francisco-based brokerage to settle a class action lawsuit, as well as numerous arbitration claims filed by investors who experienced unexpected losses in the Schwab YieldPlus Funds.

Schwab announced in a recent regulatory filing that it had received the SEC’s Wells Notice, which warned of possible civil enforcement actions against Schwab Investments, Charles Schwab Investment Management, Charles Schwab & Co., Inc. and the president of the YieldPlus Funds for alleged violations of securities laws in connection to the funds.

Companies that receive Well Notices are given a chance to respond to the SEC’s allegations before the commission decides whether to approve an enforcement action. The notice is not a formal allegation or finding of wrongdoing.

As reported Oct. 15 by Investment News, the Oct. 14 Wells Notice against Schwab heightens the probability that the company may likely need to settle its class action lawsuit over the YieldPlus Fund Select Shares and YieldPlus Investor Shares out of court.

Following the blow-up of the Schwab YieldPlus Funds, Charles Schwab has faced hundreds of arbitration claims by investors who lost money in the funds. Between Sept. 1 and Oct. 1, Schwab has lost seven out of 10 YieldPlus arbitration cases with the Financial Industry Regulatory Authority (FINRA), according to the Investment News article.

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted Schwab YieldPlus investment losses. For information regarding how to opt out of the Charles Schwab class action or if you would like to discuss the facts and circumstances surrounding your Schwab YieldPlus investments, please leave a message in the comment box below or via  the Contact Us form. We want to counsel you on your legal options.

This entry was posted on Friday, October 16th, 2009 at 7:05 amand is filed under Bond Funds, Charles Schwab, Opt-out vs. Class-action, Schwab YieldPlus. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.