We have spoken with a number of Schwab YieldPlus
Fund shareholders over the past month who are weighing their options with
respect to which route they might wish to follow in attempting to recover their
losses. Charles Schwab's Client Advocacy Team appears to be proactively
contacting Schwab YieldPlus Fund shareholders and making settlement offers to
various individuals.
In evaluating your recovery options, a practical first step would be to contact the Client Advocacy Team to explore whether Charles Schwab might be willing to make a reasonable settlement offer to you and, if so, how much Charles Schwab is willing to offer to you. The address and telephone number for the Charles Schwab Client Advocacy Team are as follows:
Charles Schwab & Co., Inc.
Client Advocacy Team
101 Montgomery Street
San Francisco, CA 94104-4104
(800) 468-3774
We are actively advising clients on how to best navigate this process to achieve the best results.
Some Schwab YieldPlus Fund shareholders are reporting to us that Charles Schwab Client Advocacy Team representatives are playing audiotapes of conversations that the shareholders had with Charles Schwab financial consultants or traders about the Schwab YieldPlus Fund when the shareholder initially communicated their orders to purchase the fund. It is our belief and opinion that these recorded conversations will support rather than detract from the strength of your potential claim against Charles Schwab because it is highly unlikely that Charles Schwab's employees were even aware of the level of risk associated with purchasing the fund, much less able to disclose those risks to potential purchasers of the fund.
We are requesting that our prospective clients sign authorization letters instructing Charles Schwab to maintain custody, possession and control of these taped conversations for production during discovery and use in the presentation of our clients' claims in their arbitration hearings.
Another topic that is coming up frequently during settlement discussions between Schwab YieldPlus Fund shareholders and Charles Schwab Advocacy Team members is the issue of what is the proper measure of the shareholder's damages in the fund. There are a number of valid ways to calculate damages such as "recissionary damages," "well managed account damages" and "net out-of-pocket damages."
Charles Schwab appears to be focusing on its customers' net out-of-pocket damages. These damages are calculated by subtracting the total cost of all Schwab YieldPlus Fund purchases (including reinvestment of monthly dividends back into the fund) from the total net sales proceeds realized by the liquidation of all Schwab YieldPlus Fund shares owned by the shareholder plus the dividends actually received by the shareholder (that is, those dividends that were not reinvested back into the fund).
Charles Schwab appears to be treating dividends reinvested back into the fund as distributions actually received by shareholders rather than money that was used to make additional purchases of the fund. We believe that, conceptually, Charles Schwab's methodology is incorrect and can result in a significant error in Charles Schwab's favor in the computation of your net out of pocket damages.
Your Charles Schwab monthly statements for the months in which you sold your Schwab YieldPlus Fund shares contains Charles Schwab's calculations of the amounts of your losses resulting from your sale(s) of Schwab YieldPlus Fund shares [Realized Gain or Loss on Investments Sold]. You can also access this information for your account from the www.schwab.com/trading/center website.
For investors who reinvested their Schwab YieldPlus Fund dividends back into the fund, Charles Schwab's Realized Gain or Loss on Investments Sold calculation appears to accurately reflect your total net out-of-pocket damages. For investors who did not reinvest their dividends back into the fund, the total amount of dividends received would reduce their net out-of-pocket damages.
Please feel free to contact me, Tom Shine, at (800) 838-8320 or Chris Vernon at (239) 649-5390 if you wish to consult with either of us about any of the matters discussed above. We are in the process of signing up additional Schwab YieldPlus clients (generally those clients who lost more than $20,000 in the fund) and expect to be filing a number of new claims in the very near future.
SEC Filing (see page 29)
Schwab Funds Prospectus
CNNMoney
In evaluating your recovery options, a practical first step would be to contact the Client Advocacy Team to explore whether Charles Schwab might be willing to make a reasonable settlement offer to you and, if so, how much Charles Schwab is willing to offer to you. The address and telephone number for the Charles Schwab Client Advocacy Team are as follows:
Charles Schwab & Co., Inc.
Client Advocacy Team
101 Montgomery Street
San Francisco, CA 94104-4104
(800) 468-3774
We are actively advising clients on how to best navigate this process to achieve the best results.
Some Schwab YieldPlus Fund shareholders are reporting to us that Charles Schwab Client Advocacy Team representatives are playing audiotapes of conversations that the shareholders had with Charles Schwab financial consultants or traders about the Schwab YieldPlus Fund when the shareholder initially communicated their orders to purchase the fund. It is our belief and opinion that these recorded conversations will support rather than detract from the strength of your potential claim against Charles Schwab because it is highly unlikely that Charles Schwab's employees were even aware of the level of risk associated with purchasing the fund, much less able to disclose those risks to potential purchasers of the fund.
We are requesting that our prospective clients sign authorization letters instructing Charles Schwab to maintain custody, possession and control of these taped conversations for production during discovery and use in the presentation of our clients' claims in their arbitration hearings.
Another topic that is coming up frequently during settlement discussions between Schwab YieldPlus Fund shareholders and Charles Schwab Advocacy Team members is the issue of what is the proper measure of the shareholder's damages in the fund. There are a number of valid ways to calculate damages such as "recissionary damages," "well managed account damages" and "net out-of-pocket damages."
Charles Schwab appears to be focusing on its customers' net out-of-pocket damages. These damages are calculated by subtracting the total cost of all Schwab YieldPlus Fund purchases (including reinvestment of monthly dividends back into the fund) from the total net sales proceeds realized by the liquidation of all Schwab YieldPlus Fund shares owned by the shareholder plus the dividends actually received by the shareholder (that is, those dividends that were not reinvested back into the fund).
Charles Schwab appears to be treating dividends reinvested back into the fund as distributions actually received by shareholders rather than money that was used to make additional purchases of the fund. We believe that, conceptually, Charles Schwab's methodology is incorrect and can result in a significant error in Charles Schwab's favor in the computation of your net out of pocket damages.
Your Charles Schwab monthly statements for the months in which you sold your Schwab YieldPlus Fund shares contains Charles Schwab's calculations of the amounts of your losses resulting from your sale(s) of Schwab YieldPlus Fund shares [Realized Gain or Loss on Investments Sold]. You can also access this information for your account from the www.schwab.com/trading/center website.
For investors who reinvested their Schwab YieldPlus Fund dividends back into the fund, Charles Schwab's Realized Gain or Loss on Investments Sold calculation appears to accurately reflect your total net out-of-pocket damages. For investors who did not reinvest their dividends back into the fund, the total amount of dividends received would reduce their net out-of-pocket damages.
Please feel free to contact me, Tom Shine, at (800) 838-8320 or Chris Vernon at (239) 649-5390 if you wish to consult with either of us about any of the matters discussed above. We are in the process of signing up additional Schwab YieldPlus clients (generally those clients who lost more than $20,000 in the fund) and expect to be filing a number of new claims in the very near future.
SEC Filing (see page 29)
Schwab Funds Prospectus
CNNMoney
