A globally operating registered investment adviser headquartered in California has agreed to a $9 million settlement for disclosure and policies and procedures violations.
The U.S. Securities and Exchange Commission (SEC) announced June 16 that registered investment adviser Pacific Investment Management Company LLC (PIMCO), of Newport Beach, Cal., will "pay $9 million to settle two enforcement actions relating to disclosure and policies and procedures violations involving two funds PIMCO advises."
The SEC determined in the first action that from September 2014 to August 2016, PIMCO failed to disclose material information to investors concerning the use by PIMCO Global StocksPLUS & Income Fund (PGP) of interest rate swaps and the material impact of the swaps on PGP’s dividend,” the SEC states in the news release.
From April 2011 to November 2017, PIMCO didn't waive $27 million in advisory fees, as its agreement with the PIMCO All Asset All Authority Fund required, according to the release. Until at least 2018, the SEC found PIMCO didn't have appropriate written policies and procedures for its oversight of advisory fee calculations and related fee waivers.
The firm has reimbursed investors $27 million in fees, “plus interest and a performance adjustment., according to the release
“These cases highlight our continued focus on ensuring that firms adequately disclose material information and implement reasonably designed policies and procedures,” Corey Schuster, co-chief of the Enforcement Division’s Asset Management Unit, said in the release. “PIMCO failed to comply with both of these critical obligations.”
PIMCO didn’t admit or deny the SEC’s findings, having “agreed to a cease-and-desist order and a censure in each action and to pay a combined $9 million penalty,” the release said.
Ronnie Lasky and Manuel Vazquez conducted the SEC’s investigations “under the supervision of Brent Wilner with the Enforcement Division’s Asset Management Unit and Gary Leung, Regional Trial Counsel, all in the Los Angeles Regional Office,” the release said.