Charles Schwab Corp. of San Francisco is facing a potential class-action lawsuit over no-load ultra short bond fund that allegedly loaded up on mortgage-backed securities and misled investors.

In a lawsuit filed March 18 in U.S. District Court, Northern District of California, lead plaintiff and Schwab fund investor Mike Labins alleges that the Schwab YieldPlus Fund he purchased was portrayed as a higher-yielding alternative to a safe, liquid Schwab money market fund.

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