Hagens Berman Sobol Shapiro Announces Class Action Lawsuit Against Charles Schwab Concerning YieldPlus Funds
Hagens Berman Sobol Shapiro Representing Schwab YieldPlus
Investors as Fund Plummets 23.87 Percent YTD
Lead plaintiff deadline May 16, 2008
SEATTLE--(Business Wire)--
The first class-action lawsuit filed by stockholders against
investment giant Charles Schwab (NASDAQ:SCHW) concerning its YieldPlus
Funds Investor Shares (NASDAQ:SWYSX) and YieldPlus Funds Select Shares
(NASDAQ:SWYPX) is sparking dramatic reactions from investors, as the
fund's NAV drops to 6.80, according to the law firm which filed the
original suit.
The year-to-date return is now a negative 23.87 percent.
For more information about the suit e-mail info@hbsslaw.com or
visit www.hbsslaw.com/schw.
Hagens Berman Sobol Shapiro has received requests to join the
action from hundreds of investors from across the country who felt
they were misled by Schwab. Losses from those investors alone total
millions of dollars.
According to attorney Reed Kathrein, the range of investors
inquiring about the class action runs the gamut from investment
advisors to retirees. Money managers and registered investment
advisors who followed Schwab's advice are also upset as their clients
are inquiring whether they can join or have losses large enough to be
the lead plaintiff.
"The common thread is Schwab's representation that the YieldPlus
funds were an alternative to cash, CDs and money market funds, which
we are finding to be far from the truth," said Kathrein.
The lawsuit, first filed by Hagens Berman on March 18, 2008 in
U.S. District Court in Northern California, alleges Schwab omitted
important information from the funds' SEC Registration Statement,
Prospectus and selling representation, including how heavily the funds
were exposed to sub-prime mortgage risks. The lawsuit claims more than
50 percent of the funds' assets are invested in the risky mortgage
industry -- a percentage that grew as the company abandoned the
original objectives of the funds in pursuit of higher yields.
Aside from claiming there was no sub-prime exposure in the
YieldPlus funds, one former Charles Schwab client told Hagens Berman,
"We were told to roll over our retirement fund CDs into these funds."
Many have now lost more than 25 percent of their principal.
Charles Schwab advertised the YieldPlus funds as ultra-short bond
funds that serve as a higher-yielding alternative to money-market
funds and offer low risk to investors. Charles Schwab also claimed to
offer 'investments in a large, well-diversified portfolio that a
seasoned team of taxable bond portfolio managers actively managed,'
the complaint states.
The lawsuit seeks to represent investors or their money managers
who purchased shares after March 17, 2005. By mid-2007, the funds held
more than $13.5 billion in assets. The share price for the funds began
decreasing in July 2007, suffering a total loss of more than 21
percent throughout the year, compared to a drop in the S&P 500 index
fund, SPY, of less than six percent. Today the funds stand at an
all-time low of $6.80, down more than 23 percent from Jan. 1, 2008,
the complaint states.
Hagens Berman's extensive investigation continues. The firm
welcomes information from former employees and witnesses, and
documentation concerning Schwab's sales practices.
Any investors in a Schwab YieldPlus fund during the outlined class
period may be eligible to join this suit and move to be a lead
plaintiff. The deadline for moving is May 16, 2008. Investors can
contact plaintiff's counsel, Reed Kathrein, at 510-725-3000, or via
e-mail at info@hbsslaw.com. More information on this lawsuit is
available at www.hbsslaw.com/schw.
About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro is based in Seattle with offices in
Chicago, Cambridge, Los Angeles, Phoenix and San Francisco. Since
1993, it has developed a nationally recognized practice in
class-action and complex litigation. Among recent successes, HBSS has
negotiated a $300 million settlement in the DRAM memory antitrust
litigation, one of the largest anti-trust settlements in history; a
$340 million recovery on behalf of Enron employees; a $150 million
settlement involving charges of illegally inflated charges for the
drug Lupron, and served as co-counsel on the Visa/Mastercard
litigation which resulted in a $3 billion settlement, the largest
anti-trust settlement to date. HBSS served as counsel in a $850
million Washington Public Power Supply settlement and represented
Washington and 12 other states against the tobacco industry that
resulted in the largest settlement in history. For a complete listing
of HBSS cases, visit www.hbsslaw.com.
Hagens Berman Sobol Shapiro
Reed Kathrein, 510-725-3000
Reed@hbsslaw.com
or
Firmani + Associates Inc.
Mark Firmani, 206-443-9357
Mark@firmani.com
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