| 16 July 2009

Yet another FINRA arbitration panel awarded restitution to an investor for alleged misrepresentations made by Schwab about its Schwab YieldPlus Fund. The panel awarded a San Diego resident $157,498, or a complete replacement of their losses in the fund.
The YieldPlus fund, which reached as much as $14 billion in assets under management, started to unravel in late 2007 when the markets headed south and investors fled the fund due to extremely poor performance. Now, only about $60 million in funds are still being managed in the fund, which was pitched as a safe, high-yielding alternative to money market funds.

Schwab has since been mired in arbitration hearings about the fund and has settled more than $21 million in restitution to investors to-date this year. The fund, which bills itself as an ultra-short bond fund, is down more than 11% so far this year.