Hagens Berman Responds to Attempt by Schwab to Withdraw from YieldPlus Settlement

Nov 08, 2010 | View Case Page

SEATTLE – Charles Schwab Corp. (NYSE: SCHW) announced today that it is pulling out of a $235 million settlement to close claims that the brokerage company misled investors about the risks associated with its YieldPlus bond fund.

Hagens Berman Managing Partner Steve Berman issued the following statement regarding Schwab's announcement:

"We were surprised by the announcement by Schwab that they are attempting to renege on the settlement agreement we reached on behalf of class members in the YieldPlus case.

"We were also very surprised at Schwab's rationalization for its move; that since there were plaintiffs with claims outside the scope of the claims the class could bring action under California law, Schwab could kill the agreement the company made with the class members. Schwab's logic in reaching this conclusion is curious at best.

"Schwab hired one of the nation's premier law firms, which negotiated and signed the settlement documents. Schwab's in-house lawyers were involved every step of the way. Those documents clearly stated that the claims outside the class action were not released by the agreement.

"Schwab and their counsel are a sophisticated group. They knew what they were doing - or should have. The notion that they can walk away from the agreement because they now realize they won't get complete amnesty is farfetched.

"We do not intend to give back a dime of the settlement money Schwab has deposited on behalf of the class members, and we intend to ask the court to hold Schwab in contempt for their effort to rewrite a deal they negotiated and signed.

"Since we just received their motion hours ago without any prior notice, we cannot say more than that."

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