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Bond Fund Investor win in Court
04-11-2010, 03:41 AM
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#1
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Bond Fund Investor win in Court
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04-11-2010, 05:16 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 6,256
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I particularly liked the parting shot:
Quote:
Just because advice is unbiased doesn't mean it's good.
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__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
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04-11-2010, 06:32 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,012
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Very interesting article. Thanks for posting.
Audrey
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Retired since summer 1999.
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04-11-2010, 06:47 AM
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#4
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
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Yes, appreciate the link. Thanks.
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04-11-2010, 11:30 AM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Posts: 5,072
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I do not do business with them... Never will now!
I had a Mutual Fund at one time with a different company that got caught allowing hedge funds to buy after shares after the market closed which enabled the hedge funds to arb. I immediately closed my account and moved my money. I got a court settlement later. The fund no longer exists.
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04-14-2010, 03:51 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Posts: 7,733
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I have been a loyal Schwab customer for more than 25 years. Over the years they've delivered exceptional service. Unfortunately, my mom and I both invested in YieldPlus and lost around 10K which is remarkable for a low-risk short term bond fund.
Charles Schwab himself apologies about YieldPlus, but now that I finally understand what they did that caused the disaster the apology isn't cutting it. I hope Schwab does the right thing and pays back its customers.
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04-14-2010, 07:30 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,809
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I guess what disturbed me was that Schwab tried to defend itself on a technical detail, saying it didn't violate the letter of its funds bylaws. Apparently, the court didn't agree, but even if it had, the spirit was clearly violated. It makes you wonder if any of the reams of stuff you are given in a prospectus is to protect YOU or only the company selling the product.
One thing is certain, Schwab will pay a price for this (and probably should pay a higher price). Since this was just one little piece of the "fall-out" of the whole mortgage-backed securities disaster, the greater financial "press" will probably let it get lost in the shuffle for the most part.
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Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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04-15-2010, 07:59 AM
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#8
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Posts: 12,483
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Quote:
Originally Posted by chinaco
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Doesn't surprise me...Schwab isn't as squeakly-clean as a lot of folks on here think they are..............
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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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04-15-2010, 04:08 PM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
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Quote:
Originally Posted by clifp
I have been a loyal Schwab customer for more than 25 years. Over the years they've delivered exceptional service. Unfortunately, my mom and I both invested in YieldPlus and lost around 10K which is remarkable for a low-risk short term bond fund.
Charles Schwab himself apologies about YieldPlus, but now that I finally understand what they did that caused the disaster the apology isn't cutting it. I hope Schwab does the right thing and pays back its customers.
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I've also been with Schwab many years with excellent results. Strictly self-managed other than having some questions regarding mechanics answered from time to time.
I've never had a position in YieldPlus, although I did look at it when it came out.
At this stage, this hasn't cost me anything and I'm otherwise totally satisfied with them as a brokerage house. It seems like it would be unlikely to have anything similar happen again in the near future. I'm not sure that pulling out to "punish" them wouldn't just be cutting off my nose to spite my face. And, at a minimum, it would be a ton of work to evaluate an alternative and execute the move.
I hope you are reimbursed.
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04-15-2010, 04:36 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2007
Posts: 5,072
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IMO - it is not a matter of punishment... it is more about trust. But you make a good point, why reward the behavior?
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04-15-2010, 08:56 PM
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#11
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
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If your post is in reference to mine..... I did not make that point.
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04-16-2010, 03:04 AM
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#12
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http://www.marketwatch.com/story/sch...k=MW_news_stmp
Quote:
Federal securities law claims asserted against the Bond Fund and company defendants in the same case remain pending. The company is preparing for a May 10, 2010 trial date and continues to believe it has strong defenses, especially in view of the global credit crisis, the fact that depressed market valuations and illiquidity were not limited to mortgage-backed securities and impacted other asset classes held by the Bond Fund to the same or an even greater extent, and the fact that the Bond Fund's holdings in mortgage-backed securities were widely disclosed, consistent with regulatory requirements and industry standards. Nevertheless, litigation and jury trials in particular are inherently unpredictable, and an adverse judgment could result in material liability to the company of as much as $890 million, the amount of damages plaintiffs have asserted relating to their federal securities law claims. The company has participated in several rounds of mediation with plaintiffs; at this time, however, the company is unable to determine whether further discussions with plaintiffs could result in a settlement before trial. At present, the company is unable to predict the outcome of proceedings on plaintiffs' federal securities law claims and therefore has not established a reserve for any potential liabilities in connection therewith. If a liability were incurred, in view of claims to date under applicable insurance policies, it is likely that such a liability would exceed available coverage.
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04-16-2010, 05:50 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2006
Posts: 7,733
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I have "punished" Schwab in that I no longer own their mutual funds (a token amount of Schwab Yield Plus). There low-cost no-commission ETFs they rolled out over the last few month would normally be a no brainer for me to purchase, but I am going to be cautious about investing in them until they have a track record.
BTW, a more accurate headline for the initial link, is Schwab bond customers don't lose in court, the court denied a summary judgment for the defendant. There is a long way before Yield Plus customer actually win and collect money.
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