Charles Schwab filed arguments in federal court in San Francisco to try to preclude the Securities and Exchange Commission from suing it over its YieldPlus fund. Once one of the biggest short-term bond funds in the world, with $13.5 billion at its peak in 2007, YieldPlus lost 35%, before dividends, in 2008 due to high exposure to mortgage-backed securities, which comprised nearly 50% of its portfolio. Today, a mere shell of its former self, it stands at $184 million.

In a Wells notice, the SEC accused of Schwab of marketing the fund as being as safe as a money market fund and of withholding information about the fund's risk from retail investors ahead of a rush of redemptions by Schwab proprietary mutual funds.

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