Pimco to pay $9 Million over SEC Allegations
Pacific Investment Management Co., (Pimco), has agreed to pay $9 Million to settle allegations by the US Securities and Exchange Commission that it violated agency rules in advising two funds. The SEC claimed that Pimco failed to disclose important information to investors regarding the potential impact of swaps on its PIMCO Global StocksPLUS & Income Fund between 2014 and 2016. The regulator also alleged that Pimco had failed to waive fees totaling $27 million between 2011 and 2017 and that it lacked written policies and procedures relating to fees.
Pimco, as well as the lawyer who represents the company, did not immediately respond when contacted for comment. Newport Beach is the firm’s headquarters. Pimco didn’t admit or deny SEC findings in either case.
Pimco must pay $2.5 Million as part of the fee settlement. The SEC said that the settlement was due to an incorrect formula. Pimco had agreed that certain fees would be waived for the management and administration of its All Asset All Authority Fund. Pimco, however, failed to waive $27M in fees from April 2011 to November 2017. This was due to a calculation error. The SEC stated that fees were returned in 2018 to investors as lost performance and interest. The All Asset All Authority Fund’s assets were $1.86 billion as of May 31.
Regarding the allegations related to swaps disclosures in the PIMCO Global StocksPLUS & Income Fund, Pimco agreed to pay $6.5 million. Assets currently total $83.7 million.
As regulators continue to examine the asset-management industry for possible violations of rules and regulations, this settlement is a welcome development. Pimco, one of the largest fund managers of bond funds in the world with assets of more than $1.8 trillion as of March 31, is one of the biggest in the industry.
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