The Securities Law Firm of Mark A. Tepper, P.A. has filed individual claims against Charles Schwab (Nasdaq: SCHW), alleging the discount brokerage firm misrepresented that the Schwab YieldPlus Fund (“YieldPlus”) was suitable as “a smart alternative for your cash.”
The claims, filed with the Financial Industry Regulatory Authority (FINRA), allege that
Schwab trained its agents to sell YieldPlus as a “smart alternative for your cash.”
“However, unlike cash and money market funds, YieldPlus’ portfolio held large positions in long term securities which exposed the portfolio to substantial market risk,” the claims allege.
That market risk was realized when, “YieldPlus posted steep losses in 2007-2008, during the financial collapse, because more than half its portfolio holdings were mortgage backed and asset backed securities,” the claims contend.
The claims allege that Schwab encouraged retail customers like the Claimants, to hold onto their YieldPlus shares and that “In contrast, Schwab was liquidating YieldPlus from its other mutual funds, as well as its funds operated for the benefit of Schwab senior management.”
“Its liquidation of YieldPlus for its executives clearly shows Schwab putting its own financial interests ahead of Claimant’s. Schwab was selling its YieldPlus to get out before the inevitable YieldPlus crash, leaving Claimant and others to suffer the losses,” the claims contend.
Requests from Charles Schwab YieldPlus Fund investors, to opt out of the YieldPlus Class Action lawsuit and have their case handled individually, must be postmarked no later than January 14, 2011.
About Mark A. Tepper, P.A. (www.MarkTepper.com)
A former Chief Trial Counsel at the Bureau of Investor Protection and Securities, Attorney Mark Tepper has earned the reputation of “Investor Advocate” while practicing law for over 35 years and representing the individual investor. A member of the Florida, New York and California Bars, Mr. Tepper is AV®-rated, the highest rating of lawyers in the Martindale-Hubbell Law Directory.
|Mark Hopkinson, NewsMark Public Relations|
Filed under: Business