A judge overseeing a case involving losses suffered by Schwab YieldPlus fund investors said a 2007 e-mail written by a Schwab managing director was a "smoking gun," Bloomberg reports.

“The jury could certainly construe that to mean: ‘We have not been honest with our investors," Bloomberg quotes U.S. District Judge William Asup as saying at a hearing on Wednesday.

The author of the e-mail was Janice Diamond, managing director of Schwab's credit department. In the e-mail, Diamond wrote that Schwab needed to do a "mea culpa" to clients and "admit our mistakes and make changes to prevent this from happening again."

Schwab spokesperson David Weiskopf told Bloomberg that Diamond's e-mail was one of millions Schwab provided in the case and should not be singled out. He said other documents support Schwab's claims that the credit crisis caused the fund's losses.

“That e-mail isn’t any smoking gun,” Weiskopf told the wire service. 

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