A Los Angeles based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded market adjusted damages to a California resident as a result of losses sustained in the Charles Schwab YieldPlus Fund. The panel awarded Victor Chang 100 percent of his market-adjusted damages of $74,745.00, plus an additional $13,500.00 designated as expert witness fees, plus $225.00 as reimbursement for the non-refundable portion of the initial filing fee, and assessed the entire cost of the arbitration proceeding against Charles Schwab (SCHW).
This award is significant in that the market-adjusted damages awarded in this case are approximately 1.27 times the amount of the net out-of-pocket loss in this case. Market-adjusted damages compensate for the difference between the higher amount the claimant would have received had his money been invested appropriately, less the amount he actually received.
“Although Charles Schwab represented the Schwab YieldPlus Fund Select Shares (SWYSX) and the Schwab YieldPlus Investor Shares (SWYPX) (the “YieldPlus Funds”) as safe conservative cash alternatives to investors, the evidence established that the YieldPlus funds were over concentrated in toxic mortgage backed securities,” said attorney Ryan Bakhtiari who represented Mr. Chang.
This award follows other recent awards on behalf of Schwab YieldPlus claimants. Earlier this month, a FINRA arbitrations panel awarded the Raymond and Elsie Kelly 100 percent of their net out of pocket losses of $74,430.77 plus interest at the rate of 3.25% per annum from July 8, 2008 through August 26, 2009, plus an additional $25,650.00 designated as attorney’s fees, and assessed the entire cost of the arbitration proceeding against Charles Schwab (SCHW). In July, a San Diego based FINRA arbitration panel awarded Everett Ross and his family 100% of their net out of pocket losses of $157,498 plus expert witness costs and assessed the entire cost of the arbitration against Schwab.
Schwab is facing many similar arbitration claims across the country. In addition, a California federal court recently certified the consolidated class action currently pending against Schwab. These arbitrations and actions allege that Charles Schwab misrepresented the Schwab YieldPlus Fund as a safe alternative to money market funds, and misrepresented or omitted other important facts about the funds, such as the fact that the fund’s holdings were over-concentrated in toxic mortgage backed securities.
“We continue to receive inquiries from investors who acquired the YieldPlus Fund as a result of Schwab’s misrepresentation of it as a suitable alternative to a money market fund,” said J. Boyd Page, a senior partner at Page Perry in Atlanta. “Our legal team continues to investigate and pursue investor arbitrations on behalf of investors who purchased the YieldPlus Fund,” he added.
The brokers who sold the Schwab Yield Plus fund are not targets of investor claims, according to the investors’ legal team which includes the firms of Aidikoff, Uhl & Bakhtiari, of Beverly Hills, Calif.; Maddox, Hargett & Caruso, P.C., of Indianapolis, Ind. and New York, N.Y.; Page Perry, of Atlanta, Ga.; and David P. Meyer & Associates Co., L.P.A., of Columbus, Ohio.
More information is available at http://www.subprimelosses.com/charles-schwab.php .