SEC fines Vanguard more than $100 million for violations involving target-date pension funds

Asset management giant Vanguard has been fined more than $100 million pay the expenses regarding announcements about investment funds with a target date, the Securities and Exchange Commission announced on Friday.

The violations stem from a 2020 change in which Vanguard lowered the minimum investment requirement for its target-date institutional funds. The SEC order found that the change spurred redemptions as Vanguard clients switched from other target-date funds to institutional versions, creating a taxable distribution for some of the remaining shareholders. The SEC said Vanguard failed to properly disclose the nature of those distributions.

“The order finds that, as a result, small investors of Investor TRFs who did not convert and continued to hold their fund holdings in taxable accounts faced historically higher capital gains distributions and tax liabilities and were deprived of potential growth in their investments. “, the SEC said in a press release.

Vanguard is one of the world’s largest asset managers, reporting more than $10 trillion in assets as of last November. The company was founded by Jack Bogle in the 1970s and has a reputation as a low-cost, investor-friendly company.

“Vanguard is committed to supporting the more than 50 million everyday investors and retirement savers who entrust us with their savings. We are pleased to have reached this settlement and look forward to continuing to serve our investors with world-class investment options,” Vanguard said in a statement.

This is breaking news. Please refresh for updates.