Schwab Terminates Settlement of Class Actions

Charles Schwab Investment Management and Charles Schwab & Co., Inc. SCHW today notified counsel for the plaintiffs in a consolidated class action lawsuit relating to the Schwab YieldPlus Fund that Schwab is invoking the termination provisions of the settlement agreements in those actions. Schwab has also filed with the court a notice of withdrawal from the original motions filed jointly by plaintiffs and defendants for final approval of the settlements. At this time, plaintiffs continue to support the original motion for final approval, which remains pending and subject to a hearing scheduled for mid-December. The Charles Schwab Corporation provided the following additional comments: In the spring of 2010 after a lengthy and cooperative negotiation with Plaintiffs' lawyers, Schwab agreed to a substantial settlement of $235 million to settle all claims in the Yield Plus class action proceedings, regardless of their merit. Schwab was fully prepared to contest the allegations at trial but wanted to provide significant and speedy financial benefit to valued clients who purchased or held the fund during the period covered by the lawsuit and to put the matter behind us. Plaintiffs' lawyers had praised the settlement as one in which clients would receive "real money" and "a high percentage of recovery."