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Published: Tuesday, 1/11/2011

Schwab to pay $118.9M in settlement with SEC

WASHINGTON — Charles Schwab Corp. Tuesday agreed to pay $118.9 million to settle federal regulators' civil charges over disclosure of the risks of a short-term bond fund.

The company called the steep decline of the YieldPlus Fund the result “of an unprecedented and unforeseeable credit crisis and market collapse” in 2007 and 2008.

But the Securities and Exchange Commission said Schwab marketed the fund as a conservative investment only slightly riskier than a money-market fund even though half of its assets were invested in high-risk securities.



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