Bloomberg the Company

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Follow Us

Industry Products

Ex-Schwab Executive to Pay $150,000 in SEC YieldPlus Case

Don't Miss Out —
Follow us on:

Nov. 21 (Bloomberg) -- Ex-Charles Schwab Corp. investment company manager Randall Merk agreed to pay a $150,000 civil fine to resolve a Securities and Exchange Commission lawsuit accusing the company of misleading investors in its YieldPlus fund.

Merk and another Schwab executive misrepresented to investors that the fund was comparable to a cash investment and only slightly riskier than a money market fund, the SEC said in its complaint filed in federal court in San Francisco in January.

The YieldPlus Fund fell to $1.8 billion in assets in 2008 from a peak of $13.5 billion in 2007 after deviating from its stated policy by investing more than 25 percent of fund assets in private-issuer, mortgage-backed securities, the SEC said.

Merk, who left Schwab this year, didn’t admit wrongdoing, according to a filing today. Steven Goldberg, a spokesman for Merk, declined to comment on the settlement. Merk was chief executive officer of Charles Schwab Investment Management Inc. and actively involved in the sale and marketing of YieldPlus, the SEC said.

Schwab, based in San Francisco, agreed to pay $119 million to resolve the SEC lawsuit and $235 million to settle investor lawsuits.

The case is SEC v. Merk, 11-00137, U.S. District Court, Northern District of California (San Francisco).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.