Sonn & Erez PLC Announces Notice to All Investors in the Schwab YieldPlus Funds

FORT LAUDERDALE, Fla., May 8, 2008 (Lawfuel) — A class-action
lawsuit filed by stockholders against investment giant Charles Schwab
(Nasdaq:SCHW) concerning its YieldPlus Funds Investor Shares
(Nasdaq:SWYPX) and YieldPlus Funds Select Shares (Nasdaq:SWYSX) is
sparking dramatic reactions from investors, according to the law firm
which filed the suit.

The range of investors who are complaining includes investment advisors
and 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

The common complaint was Schwab’s representation that the YieldPlus
funds were a safe alternative to cash, CDs and money market funds,
which appears to be false.

The lawsuit, filed 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.

Charles Schwab advertised the YieldPlus funds as ultra-short bond funds
that serve as a higher-yielding alternative to money-market funds and
offered low risk to investors. Charles Schwab also claimed to offer
“investments in a large, well-diversified portfolio,” the class action
complaint states.

Attorneys at Sonn & Erez believe investors will fare better in
arbitration claims than in the class action, said Jeff Sonn, Esq.,
managing partner at Sonn & Erez PLC. “The only offers we have heard
that have come from Schwab since the filing of the lawsuit were about
5% of the client’s losses, so it appears that lawsuit has not had the
effect that class action lawyers were hoping for,” said Sonn. “We think
customers who have lost more than $20,000 should consider only suing
Schwab in arbitration, which can be completed in as little as 12
months, rather than join the class action, which could take years.”

Investors in a Schwab YieldPlus fund may be eligible to file
arbitration claims to recover their losses. Sonn & Erez has been
retained by investors to sue Charles Schwab over the misrepresentations
in marketing their YieldPlus Funds, which have lost a great deal of
money due to investments in mortgage backed securities. There have been
reports that investors were seeking the safety of CDs or moneymarkets
and were steered into the YieldPlus Funds without full disclosure.

Investors should contact Jeff Sonn, Esq. at 1-866-372-8311 or
[email protected] for more information. Sonn & Erez, PLC is an
AV-Rated law firm that represents investors nationwide in stockbroker
misconduct and investment fraud cases. For 20 years, lawyers at Sonn &
Erez have represent investors against the major Wall Street brokerage
firms in claims involving stocks, options, auction rate securities,
variable annuities, hedge funds, mutual funds, bonds, and
collateralized mortgage obligations (CMOs).

Scroll to Top