Schwab YieldPlus Fund

Reno, NV Attorney serving Nevada & California

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Thomas C. Bradley has filed a number of FINRA arbitration claims against Charles Schwab & Co., Inc. on behalf of investors who lost hundreds of thousands of dollars in the Schwab YieldPlus fund. The claims allege causes of action for:

  • Breach of contract
  • Breach of fiduciary duty
  • Negligence
  • Negligent and intentional misrepresentations
  • Fraud

Allegations Against Charles Schwab & Co.

Charles Schwab offered two nearly identical YieldPlus funds: the Schwab YieldPlus – Select Shares and the Schwab YieldPlus – Investor Shares. Both funds are from the ultra-short bond fund category. While the YieldPlus fund was marketed and sold as an alternative to a money market fund or a bank certificate of deposit, the YieldPlus fund actually subjected investors to far greater risk than that of a money market fund or a bank CD.

The arbitration claims allege that Charles Schwab misrepresented the risks of the YieldPlus fund and failed to disclose important information about the securities held in the fund. Specifically, Charles Schwab marketed the fund as "a safe alternative to money market funds" that would provide "higher potential returns than money market funds, with only marginally higher risk."

Despite those representations, investors have lost over $1 billion in the YieldPlus funds. Morningstar classifies the Schwab YieldPlus Fund as an "ultra short-term bond fund." Currently, Morningstar ranks the Schwab YieldPlus Fund dead last among 127 funds in this category based on both 3 year and 5 year performance. The fund is down 16.5% over 3 years.

Even taking reinvested dividends into account, YieldPlus managed to underperform the S & P 500 index over the same periods of time. That performance is far worse than that of money market funds and other ultra-short bond funds during the same period. Among other things, the YieldPlus fund was heavily concentrated in risky securities, which caused the YieldPlus fund's losses.

Standing Up for Investors’ Rights

Stock market attorney Thomas Bradley continues to investigate the YieldPlus Fund and expects to file additional cases on behalf of other investors. To date, FINRA arbitrators have decided in favor of three different YieldPlus investors who filed FINRA arbitration claims against Charles Schwab.

Thomas Bradley has been named one of the "Top 100 Trial Lawyers" by the American Trial Lawyers Association. He has also achieved the highest rating from his peers for quality of legal work, professionalism, and ethics by receiving a Martindale-Hubbell AV-Rating for many years. He represents investors nationwide in stockbroker misconduct and investment fraud cases. The firm currently represents a number of Charles Schwab YieldPlus investors and has represented investors against most major Wall Street brokerage firms in claims involving:

  • Stocks
  • Bonds
  • Options
  • Auction rate securities
  • Hedge funds
  • Mutual funds

If you suffered YieldPlus losses, please contact the Law Office of Thomas C. Bradley today to schedule your personal consultation. Mr. Bradley serves clients in San Francisco, Sacramento, Oakland, and San Jose, California and Reno, Nevada.