Colling, Gilbert, Wright & Carter Securites Fraud
Thursday, May 22, 2008
Charles Schwab & Co. Posts Record Eernings
Charles Schwab Corp.'s first-quarter profit rose 12 percent, the firm's best first quarter performance ever, earning $305 million. Revenue during the period climbed 13 percent to $1.31 billion from $1.15 billion.
Schwab opened 246,000 in the first quarter of this year with more than $41 billion in deposits. This despite the fact Schwab YieldPlus, a mutual fund marketed as a slightly higher yielding alternative to money market accounts with a slightly higher risk profile. However the fund managers, unknown to purchasers, invested a large portion of its assets in mortgage-backed securities which began to hemorage last summer as a result of morgage failures and the overall nationwide credit crisis.
The unexpected losses in Schwab YieldPlus prompted unwary investors to start redeeming shares in mass, forcing the fund managers to sell fund assets at sharply discounted prices. At its high point, the YieldPlus fund had contained nearly $14 billion in assets. As a result of the mass exodus, the fund was valued at less than $1.5 billion, as of April, 2008.
Addding insult to injury, the Schwab YieldPlus fund now ranks as the nation's worst-performing "ultra-short" bond fund according to Morningstar, a well known and highly regarded mutual fund rating service.
At least two class action lawsuits have been filed on behalf of fund purchasers who allege they were misled about the fund's risk profile. However class actions settlements typically provide little in compensation for the aggrieved parties.
Also, Schwab has offered select clients "good will" payments believed to be in the one to twelve cents on the dollar loss range (see May 19 blog entry). This recent strategy is likely designed to salvage certain account relationships and reduce potential liability. However, many fund holders have been offerred nothing or an amount insufficient to persuade them to obsolve Schwab of all responsibility for their losses.
Which brings us to a third option, the filing of an individual arbitration claim. This option is avaialbe to all investors hoping to recoup more of their losses then will likely be achieved through class action participation or by accepting the Schwab offer of settlement.
Please contact our office to discuss your individual options for recovering losses related to Schwab YieldPlus. Thank you.
Schwab opened 246,000 in the first quarter of this year with more than $41 billion in deposits. This despite the fact Schwab YieldPlus, a mutual fund marketed as a slightly higher yielding alternative to money market accounts with a slightly higher risk profile. However the fund managers, unknown to purchasers, invested a large portion of its assets in mortgage-backed securities which began to hemorage last summer as a result of morgage failures and the overall nationwide credit crisis.
The unexpected losses in Schwab YieldPlus prompted unwary investors to start redeeming shares in mass, forcing the fund managers to sell fund assets at sharply discounted prices. At its high point, the YieldPlus fund had contained nearly $14 billion in assets. As a result of the mass exodus, the fund was valued at less than $1.5 billion, as of April, 2008.
Addding insult to injury, the Schwab YieldPlus fund now ranks as the nation's worst-performing "ultra-short" bond fund according to Morningstar, a well known and highly regarded mutual fund rating service.
At least two class action lawsuits have been filed on behalf of fund purchasers who allege they were misled about the fund's risk profile. However class actions settlements typically provide little in compensation for the aggrieved parties.
Also, Schwab has offered select clients "good will" payments believed to be in the one to twelve cents on the dollar loss range (see May 19 blog entry). This recent strategy is likely designed to salvage certain account relationships and reduce potential liability. However, many fund holders have been offerred nothing or an amount insufficient to persuade them to obsolve Schwab of all responsibility for their losses.
Which brings us to a third option, the filing of an individual arbitration claim. This option is avaialbe to all investors hoping to recoup more of their losses then will likely be achieved through class action participation or by accepting the Schwab offer of settlement.
Please contact our office to discuss your individual options for recovering losses related to Schwab YieldPlus. Thank you.
posted by
William B. Young Jr. Esq.
at
1:25 PM
Have you been
a victim of fraud?
We Can Help
<< Home