Welcome to the website for the administration of the Securities and Exchange Commission
v. Charles Schwab Investment Management, et al. enforcement action, Case No. CV-11-0136
WHA (the “Action”). This website has been established to provide general information
related to the Action, the resulting Plan of Distribution and related administration.
The capitalized terms used on this website and not defined herein shall have the
same meanings ascribed to them in the Distribution Plan.
On May 14th, 2013 the Distribution Agent commenced mailing Distribution Payments
to eligible Harmed Investors. Please allow sufficient time for postal delivery and
delays. Thank you for your patience.
Distribution Payments have been calculated as described in the Court-approved Distribution
Plan and are based on the pro-rata amount of funds allocated to eligible Harmed
Investors based on their Recognized Loss. Under the plan, two separate Distribution
Funds were established: the YieldPlus Fair Fund (for investors in YieldPlus) and
the Total Bond Disgorgement Fund (for investors in Total Bond). As stated in the
Notice regarding the distribution that was mailed in April of 2012, eligible Harmed
Investors will only receive a Distribution Payment if the amount of their payment
following pro-rata allocation equals or exceeds $25.00. Postcards were mailed to
Harmed Investors with valid claims but whose pro-rata recovery falls below the $25.00
Background of the Litigation
On January 11, 2011, the Securities and Exchange Commission (the “Commission”) commenced
an Action against Charles Schwab Investment Management (“CSIM”), Charles Schwab
& Co. and Schwab Investments (the “Defendants “) alleging they made misleading statements
regarding the Schwab YieldPlus Fund and failed to inform investors of the risk of
investing in the fund. CSIM and Schwab Investments also deviated from the YieldPlus
and Total Bond Funds’ concentration policies of not investing more than 25% of the
funds’ assets in any one industry when they invested more than 25% of each fund’s
assets in non-agency mortgage-backed securities.
A settlement was reached and, without admitting or denying the Commission’s allegations,
CSIM and Charles Schwab & Co. agreed to pay disgorgement, prejudgment interest and
penalties totaling $118,944,996. The Net Available Funds will be distributed to
Potentially Harmed Investors. A total of $110,000,000 is available for distribution
to the Harmed Investors in this Action.
On July 17, 2012, a Final Judgment was ordered in the Securities and Exchange Commission
against the Defendant Kimon P. Daifois (Case No. CV-11-0137 WHA) resulting in an
additional $325,000 of civil penalties and disgorgement to be added to the Net Available
Funds. You may view the Final Judgment under the Case Documents link above.
You can read further information on the background of this case, including the Complaint,
visiting the Securities and Exchange Commission website at
Harmed Investors are defined as individuals or entities who:
- held shares of the Schwab YieldPlus Fund as of February 28, 2006, and/or purchased
or acquired shares of the Schwab YieldPlus Fund between March 1, 2006 and March
31, 2008, inclusive, and/or
- held shares of the Schwab Total Bond Fund as of September 29, 2006, and/or purchased
or acquired shares of the Schwab Total Bond Fund between September 30, 2006 and
March 31, 2008, inclusive.
How to Participate
CS&Co. and other brokers who had clients invested in the funds during the relevant
periods provided the Distribution Agent with information about their customers’
investments in YieldPlus and Total Bond. Based on this information, certain investors
were separately mailed a Record of Fund Transaction Form. The form will outline
the investor’s transactions in the YieldPlus and/or Total Bond Funds and losses
as calculated according to the Distribution Plan. When only Potentially Harmed Investor
Name and Address information was provided, a Generic Proof of Claim Form was mailed.
Mailing of the Notice and Record of Fund Transaction Forms and Generic Proof of
Claim Forms commenced on April 23, 2012. If you received a Record of Fund Transaction
Form please follow the instructions provided on the form. If you did not receive
a Record of Fund Transaction Form and have eligible transactions, please contact
the distribution agent via email or phone to request a generic proof of claim form.
All generic proof of claim forms or Record of Fund Transaction Dispute Forms must
be submitted to the Distribution Agent no later than June 29, 2012.
Please visit our Frequently Asked Questions link at the top of the page for additional
Current Case Status:
Mailing Distribution Payments
This case is separate and distinct from the In Re Charles Schwab Corporation Securities
Litigation. If you would like more information on that case, please visit its
website at www.schwabyieldplussettlement.com