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."

According to the SEC: "Between 2005 and mid-2008, Charles Schwab Investment Management, Inc. ('CSIM'), Charles Schwab & Co., Inc. ('CS&Co.'), and Schwab Investments: (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 mislead investors; (2) deviated from the Fund's concentration policy when it invested more than 25% of the 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."

On February 16, 2011, Federal District Judge William Alsup ordered the final judgment in the matter pursuant to the consent of the SEC and the defendants Charles Schwab Investment Management, Charles Schwab & Co., Inc., and Schwab Investments.