A California federal court has issued an order allowing a Schwab YieldPlus Fund lawsuit filed against Charles Schwab to proceed as class action. The Fund is also the subject of numerous FINRA arbitrations as well as this class action. The order, filed on August 21, 2009, certified three classes, consisting of two federal classes of investors with claims under Sections 11 and 12 of the Federal Securities Act, and a single class of California investors with an unfair competition claim alleging that the fund changed its investment policies regarding asset concentration without a required shareholder vote.
The Section 11 class will include all persons or entities who acquired shares of the fund traceable to a false and misleading registration statement for the fund and who were damaged thereby. The class period for the Section 11 class is November 15, 2006, through March 17, 2008. Those who acquired shares of the fund before November 15, 2006 are excluded from the Section 11 class.
The Section 12 class will include all persons or entities who acquired shares of the fund traceable to a false and misleading prospectus for the fund and who were damaged thereby. The class period for the Section 12 class is May 31, 2006, through March 17, 2008. Those who acquired shares of the fund before May 31, 2006 are excluded from the Section 12 class.
Finally, a single state class was certified consisting of those California residents who held shares in the fund on September 1, 2006 and thereafter.
The court also ordered the parties to submit a notice and timeline for those who want to opt out of the action no later than September 10, 2009. Class members should receive the notice and timeline for opting out in the near future.
Securities class actions are designed to provide relief to multiple investors who experienced similar misconduct. Such actions are particularly beneficial for investors whose losses are too small to make an individual lawsuit economically viable.
Investors in the Schwab YieldPlus Fund who fall into one or more of the above-described classes and who have suffered significant losses will need to opt out of the Schwab class action in order to pursue individual claims against Schwab. YieldPlus investors who do not fall into one or more of the above-described classes need not opt out of the class action in order to pursue individual claims against Schwab. In either case, investors who have suffered significant losses in the YieldPlus Fund should consult with experienced counsel, who will typically evaluate the potential claim and provide a recommendation as to how best to proceed at no charge. If the recommendation is to file an arbitration claim, such cases are often handled on a contingent fee basis because many clients prefer that arrangement. Hourly or blended arrangements, however, may be appropriate and desirable in other circumstances.
Page Perry is an Atlanta-based law firm with over 125 years collective experience representing investors in securities-related litigation and arbitration. While past results are not indicative of future success, Page Perry’s attorneys have recovered over $1,000,000 for clients on more than 30 occasions. Page Perry’s attorneys are actively involved in representing institutional and individual investors with investment problems. Page Perry is co-lead counsel in arbitration claims across the country relating to the YieldPlus Fund. For further information, please contact us.