Hagens Berman Sobol Shapiro filed the first class-action lawsuit against Charles Schwab Corporation (NASDAQ:SCHW) on March 18, 2008, alleging that Schwab deceived investors about the underlying risk in its Schwab YieldPlus Funds Investor Shares (SWYPX) and Schwab YieldPlus Funds Select Shares (SWYSX).
Case Status
Settlement Amount
$235 Million
Lead Counsel
U.S. District Court for the Northern District of California
Case Number
The Charles Schwab Corporation
Stock Symbol
File Date

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.

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