Charles Schwab might have pitched to customers as a conservative cash alternative the Schwab YieldPlus Funds Investor Shares and Schwab YieldPlus Funds Select Shares (SWYPX). In fact Charles Schwab wrongly concentrate mortgage related assets in those funds causing severe losses.
Investigation and pending class action lawsuit against Charles Schwab Corporation, alleging that Schwab deceived investors about the underlying risk in its Schwab YieldPlus Funds Investor Shares (SWYSX) and Schwab YieldPlus Funds Select Shares (SWYPX).
The class action lawsuit claims Charles Schwab and the funds' underwriter deceived investors about the underlying risk in the funds, which were sold as cash alternatives and as a stable, ultra-short bond fund that was a safe alternative to cash and had a minimal risk of fluctuating share price. In fact, the funds invested in highly speculative and risky mortgage-related structured debt, according to the class action complaint.
The class action complaint also states that the funds' registration statements failed to include required facts about the investments - specifically that the funds have a high vulnerability of suddenly becoming illiquid and that the net asset values were highly speculative and inflated.
Name (Stock Symbol)
Charles Schwab Corporation, The (SCHW)
The Charles Schwab Corporation provides securities brokerage, banking, and related financial services to individual, institutional, and corporate clients.
The information provided on ClassAdvocate.com is general in nature,
does not apply to any particular factual situation, and is not and
should not be taken as legal or other professional advice. We make no
commitment or warranty that the factual, legal or any other information
on ClassAdvocate.com, or on any linked website, is accurate, complete,
error-free, or current. As such, you should not rely on such information,
and should seek professional advice if and as you determine appropriate.
ClassAdvocate.com is not a lawyer referral service, and no attorney-client
or confidential relationship is or should be formed by use of the site.
The investigations listed on ClassAdvocate.com are attorney advertisements
and do not in any way constitute a referral or endorsement by ClassAdvocate.com
or any approved or authorized lawyer referral service.