Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Three Adult Children Attack Schwab Not Rated 5.0 Email Routing List Email & Route  Print Print
Wednesday, December 15, 2010

Three Adult Children Attack Schwab

by: Neil Anderson, Managing Editor

Fundsters who have been following the Schwab YieldPlus Fund [see profile] saga may want to check out an announcement from attorney Mark Tepper. Yesterday Tepper unveiled a new Finra claim, filed on behalf of three adult childrens' trust accounts, over the fall of YieldPlus and Schwab's alleged misrepresentation of the fund as a cash alternative. (Tepper told The MFWire that the initial labeling of the trio as "minor children" was a typo.)

"However, unlike cash and money market funds, YieldPlus' portfolio held substantial positions in long term securities which exposed the portfolio to substantial market risk," the complaint reads.

Schwab spokesman Greg Gable sent The MFWire the following statement:

Because we haven't yet received the complaint we can't comment on it specifically, but we can say more generally that arbitrators have shown that they understand that the reasons for the Yield Plus Fund's decline was the credit crisis by finding in Schwab's favor in numerous arbitrations. Arbitrations have not awarded any damages in nearly half of the cases that have gone to arbitration. Even in those cases where there has been an arbitration award, it is often for only a fraction of the damages the client requested. For example, in the most recent case decided, arbitrators awarded a customer only $2500 of $25,000 requested. We believe that after taking into consideration the uncertainty of arbitration as wells as attorneys' fees and costs, most clients will do better by staying in as class members of the recently settled Federal class action lawsuit.


The adult children in question are Jessica Liza Shapiro, Melissa Jill Shapiro and Tammie Eve Shapiro. Michael Spencer is their trustee.

Attorneys have brought numerous claims against Schwab over YieldPlus. And last month Schwab and attorneys in a class action civil suit (as opposed to a Finra claim) agreed to a $235 million settlement over the fund.


Company Press Release

T. LAUDERDALE, Fla., Dec. 14, 2010 -- The law firm of Securities Fraud Attorney Mark A. Tepper has filed claim against Charles Schwab (Nasdaq: SCHW) on behalf of the Trust Accounts of three minor children, alleging the discount brokerage firm misrepresented that the Schwab YieldPlus Fund ("YieldPlus") was suitable as "a smart alternative to cash."

"However, unlike cash and money market funds," the claim alleges, "YieldPlus' portfolio held substantial positions in long term securities which exposed the portfolio to substantial market risk."

That substantial market risk was realized when, "Schwab YieldPlus posted steep losses in 2007-2008, during the financial collapse, because more than half its portfolio holdings were mortgage backed and asset backed securities, instead of cash and ultra short bonds," the claim contends.

The claim, filed with the Financial Industry Regulatory Authority (FINRA), further alleges that Schwab misrepresented that YieldPlus was an ultra short bond fund and changed YieldPlus' fundamental investment policy without the required shareholder vote.

The claim contends that Schwab paid its registered representatives undisclosed higher commissions, to induce YieldPlus recommendations to its customers, including the children's Trustee, who wanted safety. "YieldPlus was aimed at savers, like Claimant, who used YieldPlus as a money market account to hold cash," the claim alleges.

"Schwab encouraged retail customers, like the children's Trustee, to hold onto their YieldPlus shares. In contrast, Schwab was liquidating YieldPlus from its other mutual funds, as well as its funds operated for the benefit of Schwab senior management. Its liquidation of YieldPlus for its executives clearly shows Schwab was selling its YieldPlus to get out before the inevitable YieldPlus crash, leaving the children's Trustee and others to suffer the losses," the claim alleges.

About Mark A. Tepper, P.A. (www.MarkTepper.com)

Attorney Mark Tepper has earned the reputation of "Investor Advocate" while practicing law for over 35 years and representing investors in criminal and civil actions. A member of the Florida, New York and California Bars he is AV®-rated, the highest rating of lawyers in the Martindale-Hubbell Law Directory.

MEDIA CONTACT:

Mark Hopkinson, NewsMark Public Relations

561-852-5767 mhopkinson@newsmarkpr.com

SOURCE Mark A. Tepper, P.A. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

5.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2021: Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly


  1. Women in ETFs Global 2021 Virtual Conference, Jan 26-27
  2. Nicsa webinar - Investment Data Science: A World Outside of Spreadsheets, January 27
  3. MFDF Director Discussion Series - Open Forum via Zoom, January 27
  4. MFDF webinar - Post-Election Insights on Regulations and Issues That Affect Mutual Funds, January 28
  5. MMI Executive IQ Webinar: The 2021 Leadership Imperative, January 28
  6. ICI webinar - DOL's Stance on ESG Investments: A Look Ahead to 2021 and Beyond, January 29
  7. MFDF webinar - A New Fair Valuation Framework for Fund Directors, February 3
  8. MFDF Director Discussion Series - Open Forum via Zoom, February 10
  9. ICI webinar - ESG Fund Investing: The 2021 Landscape, February 16
  10. MFDF Director Discussion Series - Open Forum via Zoom (West Coast), February 24
  11. NICSA 2021 Strategic Leadership Forum, Feb 24-26
  12. IDC Foundations for Fund Directors, Mar 1-2
  13. MFDF Director Discussion Series - Open Forum via Zoom (Midwest), March 10
  14. 2021 Virtual Mutual Funds and Investment Management Conference, Mar 15-19
  15. ETFGI Global ETFs Insights Summit - ESG & Active ETF Trends, Mar 24-25
  16. MFDF Director Discussion Series - Open Forum via Zoom, March 24
  17. MFDF Director Discussion Series - Open Forum via Zoom, April 7
  18. ETF.com Awards 2020, April 20
  19. MFDF Director Discussion Series - Open Forum via Zoom (Northeast), April 21
  20. 44th Annual AIMSE Marketing & Sales Conference, May 2-4
  21. MFDF Director Discussion Series - Open Forum via Zoom (Southeast), May 5
  22. ICI 2021 General Membership Meeting - Day 1, May 6
  23. ICI 2021 General Membership Meeting - Day 2, May 13
  24. 2nd annual ETFGI Global ETFs Insights Summit - USA, May 19-20
  25. MFDF Director Discussion Series - Open Forum via Zoom, May 19
  26. ICI 2021 Operations and Technology Conference, May 20




©All rights reserved to InvestmentWires, Inc. 1997-2021
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use