Charles Schwab To Pay $200 Million To Settle Law-Suit (SCHW)
Charles Schwab Corp. (NYSE: SCHW) has agreed to pay $200 million in a settlement for a federal class-action suit filed against it. The suit pertains to its YieldPlus ultra-short bond fund. However, the discount broker has not admitted liability. According to The Wall Street Journal, Charles Schwab Corp. (SCHW) has said that the deal "allows the company to avoid the distraction and uncertainty of a trial and the further possibility of a protracted appeals process."
According to Charles Schwab Corp., the YieldPlus ultra-short bond fund invests in fixed-income securities including mortgage-backed securities. However, the credit crisis hampered the performance of the fund, “leading to the litigation”. The company’s president and chief executive officer Walt Bettinger, said, “We believe that bringing this aspect of the case to a constructive conclusion is in the best interests of all parties, including the company, its stockholders, and clients."
