Pomeroy v Charles Schwab - $850,000 (SWYCX) Award
In April 2010, a FINRA arbitration panel in San Francisco, CA ordered Charles Schwab to pay the Claimants $850,000 including $150,000 in attorneys' fees, $14,850 in costs including expert witness fees and interest on the award at the rate of 7%. The award was made after a hearing wherein the Claimants alleged that Schwab misrepresented its California Tax-Free YieldPlus (SWYCX) bond fund as a low risk alternative to money market funds and as being consistent with capital preservation. Dr. Prendergast testified on behalf of the Claimants that the California Tax-Free YieldPlus fund was much riskier than money market funds and that its holdings were inconsistent with those of money market funds. He also testified that the Claimants suffered $604,094 in capital losses.