Archive for the “Opt-out vs. Class-action” Category

Schwab Yield Plus investors have approximately two weeks to opt out of a Schwab Yield Plus class action lawsuit involving the Schwab Yield Plus Fund Select Shares (SWYSX) and the Schwab Yield Plus Investor Shares (SWYPX). The deadline to opt out is Dec. 28, 2009.

San Francisco broker Charles Schwab marketed and sold the Yield Plus funds as a safe alternative to money market accounts, depicting the funds as a way to preserve capital while generating income at relatively low risk. Unfortunately for investors, those representations did not live up to their hype. Evidence shows that the Schwab Yield Plus funds contained more than 45% of toxic mortgage- and asset-backed securities, which exposed investors to the potential of more risk and greater financial losses.

More investors are filing individual arbitration claims with the Financial Industry Regulatory Authority (FINRA) as they try to recover their investment losses in the YieldPlus funds.  Among the allegations in their complaints: Charles Schwab misrepresented the Yield Plus products by failing to disclose the fact that the funds were over concentrated in risky mortgage-related holdings.             

Investors need to understand that they are considered part of a class action - and bound by the lawsuit’s final outcome - unless they formally request exclusion. For some Schwab Yield Plus investors who suffered significant financial losses in their Schwab Yield Plus investments, filing an individual claim with FINRA may present a better opportunity to recover more of their financial losses. Investors should consult with legal counsel to thoroughly review all of their options.

For additional information about opting out of the Schwab Yield Plus class action before the Dec. 28 deadline, please contact us at 866-827-6537. 

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.

The Schwab Yield Plus Funds - the Schwab Yield Plus Fund Select Shares (SWYSX) and the Schwab Yield Plus Investor Shares (SWYPX) - lost more than 40% of value due to over concentration in risky mortgage backed securities. Investors, meanwhile, were sold on the funds for their supposed conservative, money market-like nature. In the end, all Yield Plus investors found themselves subject to huge financial losses because of misrepresentations and mismanagement on the part of Charles Schwab.

Thousands of Yield Plus investors have filed arbitration claims with the Financial Industry Regulatory Authority (FINRA). And, in the past two months, more investors have emerged victorious in their claims against San Francisco-based Charles Schwab. Most recently, a San Diego FINRA arbitration panel awarded an investor (Case No. 09-02173) more than $327,000 in a claim accusing Schwab of misrepresentation and material omissions.

In the past two months, seven cases that were handled by our experienced securities arbitration attorneys entered into a final hearing before FINRA. Each of these cases resulted in significant awards for investors. View the award decisions of these cases.

If you are an individual or institutional investor and have questions about your SchwabYieldPlus investments, Contact Us by using the form or by calling 866-827-6537. We can evaluate your situation to determine if you have a claim.

The number of Schwab Yield Plus arbitration claims is likely to grow in the weeks ahead. News of a pending deadline - Dec. 28, 2009 - to opt out of a federal class action involving the Schwab Yield Plus Funds Select Shares (SWYPX) and the Schwab Yield Plus Funds Investor Shares (SWYSX) means more investors are expected to file individual arbitration claims with the Financial Industry Regulatory Authority (FINRA) in an effort to recover their financial losses.

Following the collapse of the housing market in 2007, thousands of investors in the Schwab Yield Plus Funds found themselves in a financial nightmare. Many Yield Plus investors say the bond funds were described to them as low-risk, conservative financial products - safe investment alternatives that mirrored money-market funds and cash substitutes. Only later did investors learn the truth: The Yield Plus Funds held large concentrations of risky mortgage-backed securities.

As a result of those concentrations, many investors lost a major portion of their principal investment in the Yield Plus Funds.

A class action lawsuit involving the Schwab Yield Plus Funds is now pending in a California federal court. On Oct. 16, the court approved a notice to all Schwab Yield Plus investors regarding their rights to participate in the class action or, as an alternative, submit an opt-out request if they wish to file an independent arbitration claim with FINRA. The deadline for investors to file an opt-out request is Dec. 28, 2009.

Additional opt-out information can be viewed here.

If you are an individual or institutional investor and have questions about your Schwab Yield Plus investments or would like more information about opting out of the Schwab Yield Plus class action lawsuit, please contact us. We are actively advising investors regarding Schwab investment losses.

Schwab Yield Plus lawsuit - That’s likely to become a common phrase as lawsuits heat up following last week’s news that the Securities and Exchange Commission (SEC) warned Charles Schwab Corp. it may face a regulatory lawsuit over its handling of the Schwab Yield Plus Funds.

Already, Schwab is at the center of hundreds of arbitration claims filed by Schwab Yield Plus (SWYPX and SWYSX) investors after the funds lost much of their value in late 2007 amid the housing market crash. According to the claims, investors allege that Schwab misled them about the characteristics of the funds, as well as failed to disclose their true nature of the risks, including the toxic mortgage securities the funds held.

In August, more than 250,000 Yield Plus shareholders brought a class action lawsuit against Charles Schwab over its Yield Plus Fund. At one point, the fund held more than $13 billion in assets. Ultimately, however, overexposure to mortgage-backed securities created huge losses, with investors calling in redemptions on their investments. In March 2008, the Yield Plus Fund reported $2.5 billion in assets. Today, it stands at $210 million.

With the class action lawsuit pending, Schwab Yield Plus Fund investors must decide whether to remain in the lawsuit and be bound by its results or formally opt out if they intend to pursue an individual arbitration claim with the Financial Industry Regulatory Authority (FINRA).

Investors who elect to opt out of the class action have until Monday, Dec. 28, 2009, to submit exclusion requests. To do this, you must:

• Provide a written statement requesting exclusion from the Schwab Yield Plus class action lawsuit;
• Sign and date the request and include your mailing address; and
• Ensure the written request is received by the Notice Administrator no later than Dec. 28, 2009. The address to mail the opt-out request is: Schwab Corp. Secs. Litigation Exclusion, c/o Gilardi & Co. LLC, P.O. Box 808061, Petaluma, CA 94975-8061.

For information about opting out of the Schwab Yield Plus class action, or if you would like to discuss the facts and circumstances regarding your Schwab Yield investments, contact us at 800.505.5515.

To date, six Schwab Yield Plus cases that entered into a final hearing before FINRA arbitration panels and were handled by our experienced team of securities arbitration attorneys resulted in significant awards for all investors. You can view these cases and the award decisions here.

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 advise you on your legal options.

Schwab Yield Plus investors have until Dec. 28, 2009, to submit a Schwab Opt-Out request. After that date, investors will automatically remain in the Charles Schwab YieldPlus class action lawsuit involving the Schwab Yield Plus Fund Select Shares (SWYSX) and the Schwab Yield Plus Investor Shares (SWYPX). Depending on an investor’s financial losses and circumstances, opting out of the class action and filing an individual arbitration claim with the Financial Industry Regulatory Authority (FINRA) could be a more viable option.

To opt out of the Schwab Yield Plus class action lawsuit, investors must take the following steps by Dec. 28:

• Provide a written statement that says you are requesting exclusion from the Schwab Yield Plus class-action lawsuit;
• Sign and date your request, as well as provide your address; and
• Mail the above information by Dec. 28, 2009, to: 

Schwab Corp. Securities Litigation Exclusions

c/o Gilardi & Co. LLC

P.O. Box 808061

Petaluma, CA 94975-8061 

Requests for exclusion must be received by the claims administrator no later than Monday, Dec. 28, 2009. The Notice of Pendency of Class Action and additional information for investors who elect to opt out of the class action can be viewed and downloaded at http://www.hbsslawsecurities.com/YieldPlus. 

For more information about opting out of the Charles Schwab class action or if you are an individual or institutional investor and have questions about your Schwab Yield Plus investments, please contact us at 866-827-6537.

Tell us about your situation with Schwab YieldPlus by leaving a message in the Comment Box below or via  the Contact Us form. We want to counsel you on your options.

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.

A U.S. District Court in San Francisco has issued a Notice of Pendency to all class members involved in the Charles Schwab YieldPlus litigation. Specifically, the notice includes details and information about the Charles Schwab YieldPlus class-action lawsuit, as well as instructions for investors who wish to opt out as a class member.

Individuals who elect to opt out must do so by contacting Gilardi & Co. LLC in writing by Monday, Dec. 28, 2009. All opt-out requests should be mailed to:

In re Schwab Corp. Secs. Litigation Exclusions

c/o Gilardi & Co. LLC

PO Box 808061

Petaluma, CA 94975-8061

In the recent Pendency Notice issued Oct. 12, three certified classes of investors are listed. They include: All persons or entities who acquired shares of the fund from Nov. 15, 2006, through March 17, 2008, and is traceable to a false and misleading registration statement and were damaged; all persons or entities who acquired shares of the fund from May 31, 2006, through March 17, 2008, and is traceable to a false and misleading prospectus for the fund; and all California resident investors who held shares of the YieldPlus Fund on Sept. 1, 2006.

All Schwab YieldPlus members who meet the above criteria will be included in the class action lawsuit unless they formally request exclusion (i.e., opt out of the class action) by Dec. 28, 2009.

The Schwab YieldPlus Pendency Notice can be viewed in its entirety at www.hbsslaw.com/schw. Investors also may contact the Notice Administrator directly at (888) 955-2703 for additional information about the Schwab YieldPlus Class Action.

If you suffered losses in the Schwab YieldPlus Funds and have questions regarding how to opt out of the class action and file your own individual arbitration claim with the Financial Industry Regulatory Authority (FINRA), please contact us at 866-827-6537.

Tell us about your situation with Schwab YieldPlus by leaving a message in the Comment Box below or via  the Contact Us form. We want to counsel you on your options.

Investors with significant financial losses in the Charles Schwab YieldPlus Funds face a key deadline to decide whether to stay in the Schwab YieldPlus class-action lawsuit or submit a written request for exclusion and pursue an individual arbitration claim with the Financial Industry Regulatory Authority (FINRA).

If investors do opt for class-action exclusion, their requests must be received by Dec. 28, 2009, at the following address:

Notice Administrator

Re: Schwab Corp. Secs. Litigation Exclusions

c/o Gilardi & Co. LLC

P.O. Box 808061

Petaluma, CA,  94975-8061

In addition, there are several other important steps that investors must follow if they elect to opt out of the Schwab YieldPlus class action lawsuit. They are:

• Investors must provide a written statement requesting exclusion from the Schwab YieldPlus class-action lawsuit;
• Investors must sign and date the request and include their mailing address; and
• Investors must mail the above information by Dec. 28, 2009, to:

Notice Administrator

Re: Schwab Corp. Secs. Litigation Exclusions

c/o Gilardi & Co. LLC

P.O. Box 808061

Petaluma, CA,  94975-8061

Other details and information about the opt-out process are available in a PDF document titled October 12, 2009, Notice of Pendency, on the Website, http://www.hbsslaw.com/files/Notice of Pendency 1012091255373465312.pdf

Investors also will find information about the Schwab YieldPlus class-action lawsuit from the plaintiffs’ counsel Web site www.hbsslaw.com or by calling 1-206-623-7292.

Remember, all requests for exclusion from the YieldPlus class action must be received by Monday, Dec. 28, 2009. After that date, investors will no longer be able to submit an opt-out request.

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 advise you on your legal options.

On Sept. 4, a FINRA (Financial Industry Regulatory Authority) arbitration panel in Reno, Nevada, awarded more than $100,000 to investors for financial losses they suffered in the Charles Schwab YieldPlus Funds (Schwab YieldPlus Fund Select Shares (SWYSX) and the Schwab YieldPlus Investor Shares (SWYPX). The panel granted an investor what’s known as a “make whole award,” finding broker Charles Schwab (SCHW) liable for 100% of claimants’ net out-of-pocket losses of $74,430, interest and $25,650 in attorney fees. In addition, FINRA assessed the entire costs of the arbitration proceeding - $5,250 - against Charles Schwab.

The Schwab YieldPlus Funds were first offered by Charles Schwab in 2004 as a safe alternative to money-market investments and as a cash substitute. According to the company, the funds were designed to preserve capital, while generating income with minimal price fluctuation.

Ultimately, those representations did not hold water. More than 50% of the Schwab YieldPlus Funds’ assets were invested in risky mortgage-related securities. When the housing market collapsed in late 2007, investors who owned shares of Schwab YieldPlus suffered huge and unexpected financial losses on an investment they had been told was a conservative, low-risk product and a money-market substitute.

From June 2007 through June 2008, the YieldPlus Funds lost 31.7%; by comparison, similar ultra short bond funds experienced little or no losses.

Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted with subprime and other mortgage-related investment losses.