Schwab YieldPlus Investors Have 30 Days To ‘Opt Out’
Schwab YieldPlus investors have approximately 30 days to opt out of a class action lawsuit involving the Schwab YieldPlus Fund Select Shares (SWYSX) and the Schwab YieldPlus Investor Shares (SWYPX). Investors who do not opt out by the deadline of Dec. 28, 2009, will be bound by the final outcome of the class action.
Investors are considered part of a class action unless they formally request exclusion. For individuals who suffered significant financial losses in their Schwab YieldPlus investments, this decision needs to be weighed carefully. Class action representation can often be an attractive legal option when individual financial losses are small. In other instances, however, filing an individual claim with the Financial Industry Regulatory Authority (FINRA) may be more economically viable. Investors should consult with legal counsel to thoroughly review all of their options.
When Schwab first advertised the Schwab YieldPlus Funds, they were characterized as a safe alternative to money market accounts, with the intent to preserve capital while generating income at relatively low risk. Ultimately, those representations did not pan out. Instead, evidence shows that the YieldPlus Funds contained more than 45% of toxic mortgage- and asset-backed securities. As a result, investors were exposed to not only more risk but also the potential for more financial losses.
Many investors have filed arbitration claims with FINRA, alleging that Charles Schwab misrepresented the YieldPlus Funds and failed to disclose crucial details about their large and inappropriate concentration in mortgage-related holdings. As reported Oct. 14 by Investment News, Schwab stated in July that it had paid $21 million in the first half of the year to settle client complaints and arbitration claims related to YieldPlus investments.
For more information about the Dec. 28 deadline to opt out of the Charles Schwab class action or if you are an individual or institutional investor and have questions about your Schwab YieldPlus investments, please contact us at 866-827-6537.
Tell us about your situation with Schwab YieldPlus Funds by leaving a message in the Comment Box below or via the Contact Us form. We want to counsel you on your legal options.
