Correction: Beneficiaries Not Minors in Schwab YieldPlus Fund Claim

FT. LAUDERDALE, Fla., Dec. 15, 2010 /PRNewswire/ -- The law firm of Securities Fraud Attorney Mark A. Tepper has clarified a claim against Charles Schwab (Nasdaq: SCHW) on behalf of the Trust Accounts of three beneficiaries who were incorrectly described as minor children.

"We immediately contacted FINRA (the Financial Industry Regulatory Authority), corrected the claim and also provided opposing counsel with a copy," Tepper said.

The claim alleges the discount brokerage firm misrepresented that the Schwab YieldPlus Fund ("YieldPlus") was suitable as "a smart alternative to cash."

"However, unlike cash and money market funds," the claim alleges, "YieldPlus' portfolio held substantial positions in long term securities which exposed the portfolio to substantial market risk."

That substantial market risk was realized when, "Schwab YieldPlus posted steep losses in 2007-2008, during the financial collapse, because more than half its portfolio holdings were mortgage backed and asset backed securities, instead of cash and ultra short bonds," the claim contends.

The claim, filed with the Financial Industry Regulatory Authority (FINRA), further alleges that Schwab misrepresented that YieldPlus was an ultra short bond fund and changed YieldPlus' fundamental investment policy without the required shareholder vote.

The claim contends that Schwab paid its registered representatives undisclosed higher commissions, to induce YieldPlus recommendations to its customers, including the beneficiaries' Trustee, who wanted safety. "YieldPlus was aimed at savers, like Claimant, who used YieldPlus as a money market account to hold cash," the claim alleges.

"Schwab encouraged retail customers, like the beneficiaries' Trustee, to hold onto their YieldPlus shares. In contrast, Schwab was liquidating YieldPlus from its other mutual funds, as well as its funds operated for the benefit of Schwab senior management.  Its liquidation of YieldPlus for its executives clearly shows Schwab was selling its YieldPlus to get out before the inevitable YieldPlus crash, leaving the beneficiaries' Trustee and others to suffer the losses," the claim alleges.

About Mark A. Tepper, P.A. (www.MarkTepper.com)

Attorney Mark Tepper has earned the reputation of "Investor Advocate" while practicing law for over 35 years and representing investors in criminal and civil actions. A member of the Florida, New York and California Bars he is AV®-rated, the highest rating of lawyers in the Martindale-Hubbell Law Directory.

SOURCE Mark A. Tepper, P.A.