A Los Angeles based Financial Industry Regulatory Authority (FINRA) arbitration panel awarded damages to a California resident as a result of losses sustained in the Charles Schwab YieldPlus Fund. The panel awarded the Eliots $80,000, plus an additional $16,000 designated as expert witness fees, plus $300.00 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 damages awarded in this case are approximately 1.23 times the amount of the net out-of-pocket loss in this case. It is also noteworthy that Mr. Eliot was the managing member of a hedge fund, rather than a claimant with little or no investment sophistication. Schwab’s deception of an experienced hedge fund manager about the true facts and risks of the YieldPlus Fund shows that all YieldPlus investors were similarly deceived.
“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 the Eliots.
This award follows other recent awards on behalf of Schwab YieldPlus claimants. Last month, a FINRA arbitration panel awarded Mr. Chang 100% of his market-adjusted damages of $74,745.00, which was 1.27 times the net out-of-pocket loss, plus an additional $13,500.00 designated as expert witness fees. Earlier last month, a FINRA arbitration panel awarded Mr. and Mrs. 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 the family of Mr. Ross 100% of their net out of pocket losses of $157,498 plus expert witness costs. The panels assessed the entire cost of the arbitrations 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 low risk cash alternative investment,” 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 .