Charles Schwab is Popped for $323,120 in a Yieldplus Case

A Financial Industry Regulatory Authority (FINRA) arbitration panel in San Francisco found Charles Schwab & Company liable and ordered them to pay the Claimants $323,120 in compensatory damages, attorney’s fees and costs in a Schwab YieldPlus Fund case.

The claim was filed in November 2009, asserting various causes of action including negligence, breach of fiduciary duty, breach of contract, fraud and violations of Colorado and New Mexico securities laws, among other things. The causes of action related to the Claimants’ investment in Schwab YieldPlus Fund.

Interestingly, the five day evidentiary hearing was held in two states due to venue changes. The first four days of the hearings were held in Santa Fe, New Mexico and the final hearing day was in San Francisco, California. After the conclusion of the hearing, the panel went into executive session to consider all of the oral and documentary evidence prior to reaching its decision. The FINRA panel concluded that Charles Schwab & Company was liable for and ordered to pay Claimants $151,715 in compensatory damages; interest on the $151,715 at the rate of 8% per annum from January 30, 2004 until the payment of the award; attorney’s fees in the amount of $144,141.75; costs in the amount of $27,264.82 and reimburse the Claimants $300 for the non-refundable portion of their filing fee. Additionally, the panel assessed the entire $13,500 in forum fees of the arbitration against Charles Schwab & Company, as well as $3,143.94 in administrative costs for the arbitrators expenses incurred for travel due to the venue change. (FINRA# 09-06446; D. Vollstedt & S. Vollstedt TTEE, Steve or Deborah Vollstedt Tru U/A DTD 02/12/2004, Deborah Vollstedt and Steve A. Vollstedt v. Charles Schwab & Company, Inc.)

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