Charles Schwab YieldPlus Fund Lawsuits
Investors in Charles Schwab YieldPlus Funds may be entitled to recover some of the losses which have been suffered in recent months. False and misleading statements were made about the funds lack of diversification and the extent of the investment in risky sub-prime mortgage securities. A Charles Schwab class action lawsuit has been filed , however, individuals who lost more than $10,000 should consider filing their own Charles Schwab YieldPlus Fund lawsuit to recover their investment losses.
The financial fraud lawyers at Saiontz & Kirk, P.A. are reviewing potential Charles Schwab lawsuits for individuals who purchased shares of:
- Schwab YieldPlus Funds Investor Shares (Nasdaq: SWYSX)
- Schwab YieldPlus Funds Select Shares (Nasdaq: SWYPX)
The Schwab Yield Plus investment funds were initially offered in November 2004 as a safe alternative to money market accounts. They were designed to preserve capital while generating income, with relatively low risk. Contrary to the representations made to investors, Charles Schwab has invested more than 50% of the funds assets in the mortgage industry. As a result of their concentration in this single risky industry, substantial losses have been suffered.
The funds investments in sub-prime mortgage backed securities are considered risky because they are rarely traded and do not have active price quotes that are maintained. These new types of mortgage securities have not been tested through market cycles and fund managers failed to minimize the risk of losses by diversifying. In addition, investors were not informed about the extent of the risk they were exposing themselves to.
Following the collapse of the sub-prime mortgage market in July 2007, investors in Charles Schwab Yield Plus funds have suffered disproportionate losses, and they may have legal options to recover some of their investment. Similar lawsuits are being pursued by our stock fraud lawyers on behalf of investors in Morgan Keegan bond funds, which were also heavily invested in these collateralized debt obligations.
Charles Schwab class action suits have been filed for investors who purchased shares in Schwab YieldPlus funds between March 17, 2005 and March 18, 2008. However, individual lawsuits are also being reviewed as a result of the false and misleading statements made by underwriters, investment advisors and fund managers regarding the diversification of the funds.
If over $10,000 has been lost as a result of an investment in one of these funds, you or family member may be better protected by an individual Charles Schwab Fund lawsuits. Request a free consultation and claim evaluation.