Defendant Name: Charles Schwab & Co., Inc.

Defendant Type: Subsidiary of Public Company

Document Reference: 2011-7-Admin

Document Details

Legal Case Name In the Matter of Charles Schwab Investment Management; Charles Schwab & Co., Inc.; and Schwab Investments
Document Name SEC Charges Schwab Entities and Two Executives With Making Misleading Statements; Schwab Entities to Pay More Than $118 Million to Settle SEC Charges
Document Date 11-Jan-2011
Document Format Administrative Proceeding
File Number 3-14184
Allegation Type Investment Advisers/Investment Companies
Document Summary On January 11, 2011, the SEC announced that it "charged Charles Schwab Investment Management (CSIM) and Charles Schwab & Co., Inc. (CS&Co.) with making misleading statements regarding the Schwab YieldPlus Fund and failing to establish, maintain and enforce policies and procedures to prevent the misuse of material, nonpublic information. The SEC also charged CSIM and Schwab Investments with deviating from the YieldPlus fund's concentration policy without obtaining the required shareholder approval."

Disgorgement & Penalty Information

Resolutions
Cease and Desist Order
Censured
Compliance Related Independent Consultant
Various undertakings

Related Documents:

33-9171 11-Jan-2011 Administrative Proceeding
Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Sections 15(b) and 21C of the Securities Exchange Act of 1934, Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, and Section 9(f) of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
On January 11, 2011, the SEC instituted settled administrative and cease-and-desist proceedings against Charles Schwab Investment Management, Charles Schwab & Co., Inc., and Schwab Investments. According to the SEC: "These proceedings arise out of the offer, sale, and management of the Schwab YieldPlus Fund (the 'Fund' or 'YieldPlus Fund'), a fixed-income mutual fund managed by Charles Schwab Investment Management and marketed and distributed by Charles Schwab & Co., Inc., which suffered a significant decline during the credit crisis of 2007-2008. Respondents: (1) offered and sold the Fund as a cash alternative without adequately disclosing the differences between the Fund and the cash investments with which it was compared, which misled investors; (2) deviated from the Fund's concentration policy when it invested more than 25% of Fund assets in non-agency mortgage-backed securities without obtaining a shareholder vote as required by statute; (3) made inaccurate statements concerning the Fund while its NAV declined; and (4) failed to establish and implement internal controls reasonably designed to prevent the misuse of material nonpublic information."

Related Actions:

SEC v. Charles Schwab Investment Management, Inc.; Charles Schwab & Co., Inc; and Schwab Investments
Charles Schwab & Co., Inc.
Charles Schwab Investment Management
Schwab Investments
SEC v. Kimon P. Daifotis and Randall Merk
Randall Merk
Kimon P. Daifotis
In the Matter Randall Merk
Randall Merk
In the Matter of Kimon P. Daifotis
Kimon P. Daifotis