Two noted money market funds, Reserve Primary Fund and Reserve International Liquidity Fund LTD, managed by Reserve Management Corporation, have “broken the buck.” “Breaking the buck” means that investors in a money market fund lose their invested principal. Stated another way, the net asset value of money market fund falls below the $1/share price paid […]
The subprime and credit crises have resulted in a surge of fraudulent misrepresentation and omission cases against Wall Street firms. A rising stock market concealed many such abuses because values were rising, making fraudulent misrepresentations and omissions hard to identify. Recently, however, many of these misrepresentations and omissions have become apparent. For example, many risk-averse […]
The subprime and credit crises affecting the economy have revealed an array of suitability abuses by Wall Street investment firms. While a rising stock market hides many abuses by brokerage firms, suitability abuses are more easily identifiable when times are tough. For example, many risk-averse investors with conservative objectives have recently discovered that they have […]
Recent actions by Charles Schwab in offering money to investors in its Yield Plus Bond Fund are tantamount to an admission that the fund was misrepresented to investors. Schwab had marketed the Yield plus Fund as a safe, conservative short-term bond fund that was a cash equivalent and offered low volatility. It was pitched as […]
Many bond funds, which are supposed to be the pillars of stability during times of market upheaval, are suffering serious subprime mortgage investment losses. The Lehman Brothers U.S. Aggregate bond index, which tracks taxable bonds, Treasury notes, corporates, and some mortgage securities, is up 2.3% from January 1 through April 4 of this year. Yet, […]
Investors across the country with accounts in Charles Schwab Corp. have learned the hard way that their so-called “money market fund” wasn’t as safe as they thought it was. The fund in question, Schwab’s High Yield Plus Select Fund (SWYSX) has declined twenty-two percent since January 2, 2007 due to excessive investments by the fund […]
On December 4, 2007, Wall Street Journal reporter Shefali Anand reported that some money market funds may be invested in risky debt securities issued by structured investment vehicles, or SIVs, that were recently downgraded or put on review for possible downgrade by Moody’s Investors Service. These money market funds include Charles Schwab Advisor Cash Reserves, […]
