Chang v Charles Schwab - $88,245 YieldPlus (SWYSX) Award

In September 2009, a FINRA arbitration panel in Los Angeles, CA ordered Charles Schwab to pay the Claimant $88,245 including $13,500 in expert witness fees. The award was made after a hearing wherein the Claimant alleged that Schwab misrepresented its YieldPlus (SWYSX) bond fund as a low risk alternative to a money market fund for cash holdings. Dr. McCann testified on behalf of the Claimant that the YieldPlus fund was much riskier than money market funds, that its portfolio was dominated by illiquid private-label mortgage backed securities containing considerable credit risk and that Schwab apparently overstated the fund's NAV in late 2007 and early 2008. He also testified that the Claimant suffered $74,745 in damages measured against a portfolio of 100% Schwab Money Market Fund.

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Craig J. McCann