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Securities Arbitration vs. Class Action
News that a Schwab YieldPlus lawsuit involving the Schwab YieldPlus Fund Select Shares (SWYSX) and the Schwab YieldPlus Investor Shares (SWYPX) is moving forth as a class action lawsuit means investors will have to decide whether to remain in the class action or "opt out" if they intend to pursue an individual arbitration claim with the Financial Industry Regulatory Authority (FINRA).
As a general rule, you are considered "in" a class action unless you formally ask to be excluded. This means an
investor must either opt out of the class action or he or she will be bound by its results. For information on how to opt out of the Charles Schwab class action, please contact us.
At this time, we can tell you that opt-out notices and other information regarding the Schwab YieldPlus class action are still being finalized but should be mailed to Schwab clients no later than Oct. 15. Following distribution of the notices, all opt-out requests must include the following:
The name and address of the person or entity requesting exclusion;
A statement that such person or entity requests exclusion from the classes in the Schwab YieldPlus lawsuit; and
The signature of the person or entity and the date the request was signed.
Notices will be distributed via direct mail and email. Information also will be available in a press release and posted to the website, www.hbsslaw.com.
There are several important issues Schwab YieldPlus investors need to consider when weighing the pros and cons of class action lawsuits versus individual arbitration claims. First, investors should determine their investment losses. For investors with minimal financial losses, the economics of opting out and proceeding in FINRA arbitration might not make sense. Investors with significant financial losses, however, may have the ability to recover a much larger percentage of their losses in a FINRA arbitration.
Oftentimes the remedies available in individual actions are greater than those offered under the federal securities laws, which preclude lost interest, attorney fees and costs. If investors have sustained losses of more than $20,000, they should consider pursuing their rights on an individual basis after consulting with competent counsel.
For additional information on how to opt out of the Charles Schwab class action or if you are an individual or institutional investor and have questions about your Schwab YieldPlus investments, please contact us.
Our affiliation of lawyers is actively involved in advising individual and institutional investors in evaluating their legal options when confronted Schwab YieldPlus investment losses. For information on how to opt out of the Charles Schwab class action or if you would like to discuss the facts and circumstances surrounding your Schwab YieldPlus investment, please contact us.
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