The lawsuit claimed Charles Schwab and the funds' underwriter deceived investors about the underlying risk in the funds, which were sold as cash alternatives, but were in fact highly speculative and risky mortgage-related structured debt, according to the complaint.
The complaint also stated that the funds' registration statements failed to include required facts about the investments - specifically that the funds have a high vulnerability of suddenly becoming illiquid and that the net asset values were highly speculative and inflated.
Since HBSS filed the first suit, many other firms filed similar class actions, and these were consolidated by the Federal Court in the United States District Court for the Northern District of California.
On July 3, 2008, the Honorable William H. Alsup appointed five members of the YieldPlus Investor Group to the position of lead plaintiff and instructed them to interview and choose lead counsel. On August 14, 2008, the YieldPlus Investor Group submitted their decision to the court to retain Hagens Berman Sobol Shapiro LLP. On August 18, 2008, the Court approved that decision.
Related documents below:
- Order on Motions to Dismiss
- Summary on Motion to Dismiss
- Order Appointing Lead Plaintiffs
- Court Order Appointing HBSS Lead Counsel
- Complaint
- Amended Complaint
- Class Certification Order
- Notice of Pendency
- Second Amended Complaint
- Judgment For Plaintiffs
- Court Order For Defendants Motions
- Court Order For Disclosure And Loss-Causation Motions
- Charles Schwab Settlement Announcement
- Berman Dec
- California Brief
- Coffin Dec
- Dickson Dec
- Federal Brief
- Fee Brief
- Hill Dec
- Joaquin California Dec
- Joint Motion California
- Joint Motion Federal
- Labins Dec
- Levin Dec
- Mikelonis Dec
- Motion Fees
- O'Donnell Dec
- Preston Dec
- Supplemental Declaration, Federal
- Supplemental Declaration, California
- Reply Declaration for Plaintiffs
- Plaintiffs' Reply Memorandum
- Final Approval of Settlement
