filing complaints: December 2008 Archives

Shine-Vernon legal team files claim on behalf of corporate client in California over Schwab YieldPlus Fund losses

By
Sara
on December 18, 2008 1:24 PM | | TrackBacks (0)
Charles Schwab & Co.'s misrepresentations about the safety of the Schwab YieldPlus Fund caused considerable harm to the business operations of a California-based company, according to a claim filed with FINRA Dispute Resolution today by the investor rights' legal team headed by former Securities and Exchange Commission attorney Thomas F. Shine and investor rights' attorneys Christopher T. Vernon and Thomas D. Mauriello.

The San Diego-based corporation, which develops service solutions for small businesses and consumers, had recently sold one of its business segments and its executives were looking for a safe place to invest the sales proceeds while they laid the groundwork for developing a new line of business for the company.  

Charles Schwab's web page promoting its Schwab YieldPlus Fund invited investors to "discover a smart alternative for your long-term cash." Charles Schwab touted the Schwab YieldPlus Fund as a safe and conservative "cash alternative" and compared its safety to that of one and two-year certificates of deposit, but investors have seen the bond mutual fund's price fall by almost 40 percent during the past sixteen months.

The claim alleges that Charles Schwab issued inaccurate statements and omitted material facts about the fund's lack of diversification and deceived Schwab YieldPlus Fund investors by concentrating the fund in mortgage and asset-backed securities while it recklessly touted the fund's safety on its web site and to financial advisors who recommended the fund.

In addition, Charles Schwab executives and former high profile fund manager Kimon Daifotis committed misconduct when they embarked on a "damage control" campaign to avert liquidations of Schwab YieldPlus by Charles Schwab clients, the claim contends. Behind the scenes, Schwab dumped 2.9 million YieldPlus shares from the portfolios of its other mutual funds from Jan. 31, 2008 to April 1, 2008 while unwitting Schwab clients simultaneously held on to their shares.

The Shine-Vernon legal team believes that this case is a prime example of the adverse economic consequences of the misconduct and deceptions engaged in by financial firms like Charles Schwab in recent years. It's not only retirees who've been hurt, but also companies small and large who thought they were maintaining their operating capital in safe, conservative accounts.

"This is the type of financial institution behavior that can have a direct impact on Main Street's ability to create and protect jobs and this misconduct should not go unpunished," Vernon said. In addition to the arbitration claim filed on behalf of the corporate client described herein, which will be heard in San Diego, the Shine-Vernon team has filed arbitration claims against Charles Schwab with the Financial Industry Regulatory Association (FINRA) on behalf of investors from California, New York, Texas, Florida, Missouri, Minnesota, Illinois and Hawaii and is currently investigating claims in New Mexico, Virginia, and several other states as part of its nationwide fraud investigation of the Schwab YieldPlus Fund.

Thomas Shine, a former enforcement attorney with the Securities and Exchange Commission in Washington, D.C., is in private practice in the Melbourne, Fla. area. Securities attorney Chris Vernon is a founding partner of the Naples, Fla. based law firm Vernon Healy, which represents investors throughout the United States. Thomas Mauriello is in private practice in Southern California and represents investors throughout California.

Release URL: http://www.protectinginvestors.com/ For information, contact:


Thomas F. Shine, attorney at law

http://www.thomasfshinelaw.com http://www.thomasfshinelawblog.com
321-724-4445
1-800-838-8320
e-mail: tfshine@aol.com

or
Christopher T. Vernon, attorney at law
http://www.vernonhealy.com
http://www.protectinginvestors.com

239-649-5390
1-877-649-5394
e-mail: cvernon@vernonhealy.com


or
Thomas D. Mauriello, attorney at law
 http://www.maurlaw.com
949-542-3555
1-888-612-1961
e-mail: tomm@maurlaw.com

Shine-Vernon legal team adds Minnesota and Missouri to list of states in which it has filed investor claims to recover Schwab YieldPlus Fund losses (SWYSX, SWYPX)

By
Sara
on December 2, 2008 11:40 AM |
Naples, Fla. -- The investor rights' legal team headed by former Securities and Exchange Commission attorney Thomas F. Shine and investor rights' attorney Christopher T. Vernon filed claims on behalf of Schwab YieldPlus Fund investors in Minnesota and Missouri today.

The Shine-Vernon team has now filed arbitration claims on behalf of investors from California, New York, Texas, Florida, Missouri, Minnesota, and Hawaii as part of its nationwide fraud investigation of Charles Schwab's misrepresentations to investors about its Schwab YieldPlus Fund.

Charles Schwab promoted its Schwab YieldPlus Fund as a safe and conservative "cash alternative" and compared its safety to that of one and two-year certificates of deposit, but investors have seen the bond mutual fund's price fall by almost 40 percent during the past sixteen months. More and more investors are seeking to file claims with the Financial Industry Regulatory Association (FINRA) in their quest for legal recourse.

Charles Schwab deceived Schwab YieldPlus investors by concentrating the fund in mortgage and asset-backed securities while it recklessly touted the fund's safety on its web site and to financial advisors who recommended the fund to investors. According to the claims filed today, Schwab issued inaccurate statements or omitted information regarding material facts about the fund's lack of diversification.

In addition, Charles Schwab executives and former high profile fund manager Kimon Daifotis embarked on a "damage control" campaign to avert liquidations of Schwab YieldPlus by Charles Schwab clients, the claims contend. Behind the scenes, Schwab quietly dumped 2.9 million YieldPlus shares from the portfolios of its other mutual funds during that time -- from Jan. 31, 2008 to April 1, 2008 -- while clients held their shares.

The claims filed today are on behalf of investors with close to $300,000 in losses. They include one claim filed on behalf of a retired publisher of a faith-based journal and another on behalf of a business owner. Both investors were seeking safety for the funds that they invested in the Schwab YieldPlus Fund.

The Shine-Vernon team was the first legal team to name Daifotis in claims filed on behalf of investors. Schwab disclosed in June that it had replaced Daifotis as the fund's lead portfolio manager and Daifotis has been terminated by Charles Schwab, the brokerage firm.

Investors have been encouraged by a recent case in which a FINRA arbitration panel awarded a Schwab YieldPlus Fund investor more than $500,000.

Although the economic outlook of many financial industry firms has been damaged in the ongoing credit crisis and recession (in no small measure because of the imprudent risks these firms took at investors' expense), the Shine-Vernon team believes that Charles Schwab is financially strong enough to pay all damages awarded against it.

Investors who lost relatively small amounts of their principal may be able to get relief from a class action lawsuit now pending against Charles Schwab, to the extent they cannot resolve their claims through Schwab's Client Advocacy Team. However, investors who have lost significant amounts of principal as a result of investing in Yield Plus, should pursue securities arbitration, the Shine-Vernon legal team believes.

Thomas Shine, a former enforcement attorney with the Securities and Exchange Commission in Washington, D.C., is in private practice in the Melbourne, Fla. area. Securities attorney Chris Vernon is a founding partner of the Naples, Fla. based law firm Vernon Healy, which represents investors throughout the United States.

For information, contact: Thomas F. Shine, attorney at law http://www.thomasfshinelaw.com http://www.thomasfshinelawblog.com 321-724-4445 1-800-838-8320 E-mail: info@thomasfshinelaw.com
or
Christopher T. Vernon, attorney at law http://www.vernonhealy.com http://www.protectinginvestors.com 239-649-5390 1-877-649-5394 E-mail: cvernon@vernonhealy.com
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