Charles Schwab & Co. announced the replacement of Kimon Daifotis, Schwab's YieldPlus portfolio manager, one day after our legal team filed what appears to be the first investor arbitration claim that names Daifotis as an individual respondent.
Our claim, filed on June 12, 2008, asserts that Daifotis, one of Schwab's most prominent fund managers, misrepresented the safety of Schwab's YieldPlus Fund whose total net assets plunged by $12 billion during the eight-month period ending April 1, 2008. Daifotis put increasing portions of the fund's assets into risky mortgage-backed securities and put the fund at risk for a huge failure when the subprime lending credit crisis rocked Wall Street.
On June 13, 2008, Schwab Investments filed an amended prospectus with the Securities and Exchange Commission that discloses that Daifotis, a Senior Vice President and the Chief Investment Officer-Fixed Income for Charles Schwab Investment Management, Inc., had been replaced as the senior portfolio manager responsible for the overall management of the Schwab YieldPlus Fund and four other Schwab fixed income funds. Mr. Daifotis' replacement is Jeffrey Mortimer, CFA, who is also a Senior Vice President and the Chief Investment Officer for CSIM.
SEC Filing (see page 29)
Schwab Funds Prospectus
CNNMoney
Our claim, filed on June 12, 2008, asserts that Daifotis, one of Schwab's most prominent fund managers, misrepresented the safety of Schwab's YieldPlus Fund whose total net assets plunged by $12 billion during the eight-month period ending April 1, 2008. Daifotis put increasing portions of the fund's assets into risky mortgage-backed securities and put the fund at risk for a huge failure when the subprime lending credit crisis rocked Wall Street.
On June 13, 2008, Schwab Investments filed an amended prospectus with the Securities and Exchange Commission that discloses that Daifotis, a Senior Vice President and the Chief Investment Officer-Fixed Income for Charles Schwab Investment Management, Inc., had been replaced as the senior portfolio manager responsible for the overall management of the Schwab YieldPlus Fund and four other Schwab fixed income funds. Mr. Daifotis' replacement is Jeffrey Mortimer, CFA, who is also a Senior Vice President and the Chief Investment Officer for CSIM.
SEC Filing (see page 29)
Schwab Funds Prospectus
CNNMoney
