INDIANAPOLIS, Sept. 15, 2009 (GLOBE NEWSWIRE) -- Maddox Hargett & Caruso, P.C. announces that a Reno, Nevada, arbitration panel of the Financial Industry Regulatory Authority (FINRA) has awarded damages to investors for financial losses they incurred in the Charles Schwab YieldPlus Funds. The panel granted Raymond and Elsie Kelly a make whole award, finding Charles Schwab (SCHW) liable for 100% of their net out-of-pocket losses of $74,430, interest and $25,650 in attorney fees. In addition, the FINRA arbitration panel assessed the entire costs of the arbitration proceeding -- $5,250 -- against Charles Schwab.
"Although Charles Schwab recommended the purchase of the Schwab YieldPlus Fund Select Shares (SWYSX) and the Schwab YieldPlus Investor Shares (SWYPX) as safe, conservative cash alternatives to investors, the evidence presented in this case established that the funds were over concentrated in high risk, speculative mortgage-backed securities," said the Kellys' attorney Tom Hargett of Maddox Hargett & Caruso, P.C.
"The evidence demonstrated that Charles Schwab misrepresented the risks of the YieldPlus Funds to the Kellys and failed to disclose important information about the securities held in the funds," added Marnie Lambert of David P. Meyer & Associates, Co., L.P.A.
Alleged causes of action in the Kellys' arbitration claim include breach of contract, breach of fiduciary duty, negligent supervision, negligent misrepresentations and omissions, and fraud.
Specifically, the claim states that Charles Schwab marketed the Schwab YieldPlus Funds as a safe investment alternative to money market funds with higher potential returns and only marginally higher risks. In truth, the Schwab YieldPlus Funds were over concentrated in private label mortgage-backed securities and exposed investors to a substantial risk of loss of principal.
From June 2007 through June 2008, investors in the YieldPlus Funds lost 31.7%, while other ultra short bond funds experienced little or no losses.
"We are continuing to investigate and pursue investor arbitrations on behalf of investors who suffered losses in the Schwab YieldPlus Funds," said Mr. Hargett.
The law firm of Maddox Hargett & Caruso, P.C. has joined an association of law firms in pursuing claims by investors who suffered losses in the Schwab YieldPlus Funds and other subprime mortgage-related investments. The laws firms include: David P. Meyer & Associates Co., L.P.A., of Columbus, OH; Aidikoff, Uhl & Bakhtiari, of Beverly Hills, CA; and Page Perry, LLC, of Atlanta, GA.
More information is available at http://www.subprimelosses.com/charles-schwab.php or by contacting an attorney below.