SEC Charges Schwab Entities and Two Executives with Making Misleading Statements

SEC Press Release

The SEC announced a settled enforcement action against two Charles Schwab entities and their employees for making material misstatements in marketing a "YieldPlus" fund as a "cash alternative" despite the presence of significant market risk in the securities the funds invested in. The SEC actions allege violations of a number of provisions of the securities laws, including anti-fraud charges under the Securities Act against the Schwab entities, and 10b-5 charges against the individuals. The Schwab entities paid over $110 million to settle the actions.

Please contact any of the following Cadwalader attorneys if you have any questions about this item:

Steven Lofchie; steven.lofchie@cwt.com

Jeffrey Robins; jeffrey.robins@cwt.com

Maurine Bartlett; maurine.bartlett@cwt.com

Glen Barrentine; glen.barrentine@cwt.com

Document Number

SEC PR 2011-7

Date

January 11, 2011

Cross References (links may require a Cabinet subscription)

SEC Release 33-9171/34-63693/IA-3136/IC-29552 (admin. action against Schwab entities)

SEC LR 21806 (action against Schwab entities)

SEC LR 21805 (action against individuals)