Schwab YieldPlus Investors Consider Class Action Versus Securities Arbitration
Aug. 21, 2009, signaled a key development in the legal arena for the Charles Schwab YieldPlus Funds. On that date, a federal court issued an order allowing a lawsuit involving the Schwab YieldPlus Fund Select Shares (SWYSX) and the Schwab YieldPlus Investor Shares (SWYPX) to proceed as a class action. For many investors who sustained losses in the YieldPlus Funds, this news means they must now either stay in the class action lawsuit or “opt out” if they wish to file an individual arbitration claim with the Financial Industry Regulatory Authority (FINRA).
Investors need to understand that you are generally in a class action unless you formally ask to be excluded. To do this, you must opt out of the class action or you will be bound by its results.
In many instances, an individual FINRA arbitration might be a better legal avenue to pursue for retail and institutional investors who’ve suffered significant financial losses due to issues involving fraudulent investments, unauthorized trades and unsuitable investments or, in the case of the Schwab YieldPlus Funds, misrepresentation. However, if an investor’s losses are small, it may not be economically feasible to proceed in a FINRA arbitration and the Schwab class action lawsuit may therefore be a more viable option.
Aggrieved investors should consider carefully whether their rights are best represented through class action lawsuits or securities arbitration. This is especially true for Schwab Yield Plus (SWYPX and SWYSX) investors. If you are an individual or institutional investor and have questions about your Schwab YieldPlus investments or would like more information about how to opt out of the Charles Schwab class action, please contact us.
Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted Schwab YieldPlus investment losses.
