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LAWSUITS NEWS & LEGAL INFORMATION

Schwab Enters Agreement to Settle All Claims in YieldPlus


This is a settlement for the Securities/Stock Fraud lawsuit.

San Francisco, CA: The Charles Schwab Corporation has announced that it has entered an agreement with plaintiffs to settle all claims in a civil class action lawsuit related to the Schwab YieldPlus Fund(R), including a California state law claim not included in an earlier settlement with plaintiffs announced on April 20, 2010. The combined settlement agreement remains subject to preliminary and final court approval. Related regulatory matters also remain open.

The combined settlement, in which the company does not admit liability, would pay $35 million to settle California state law claims in addition to the previously disclosed $200 million for plaintiffs' federal claims.

As disclosed previously, the company is the subject of consolidated class action litigation filed between March and May 2008, and regulatory investigations relating to the investment policy, disclosures, and marketing of the Schwab YieldPlus Fund, an ultra-short bond fund ("Bond Fund"). The Bond Fund was designed to invest in a variety of fixed income instruments, including corporate bonds, asset backed securities, mortgage-backed securities, and other fixed income investments. The credit crisis that began in mid-2007 led to a decline in the value of a majority of fixed income investments market wide. As a result, certain Schwab clients who chose to invest in the Bond Fund experienced a decline in their investments, leading to the litigation.

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Published on May-7-10


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