United States SEC Fines $1.8 Trillion PIMCO $9 Million for Wrongly Charging $27 Million Advisory Fees to Investors & Failure to Disclose Use of Interest Rate Swaps & Material Impact of Swaps on Dividends
21st June 2023 | Hong Kong
The United States Securities & Exchange Commission (SEC) has fined PIMCO ($1.8 trillion AUM, Assets under Management) $9 million for wrongly charging $27 million of advisory fees to investors and failure to disclose use of interest rate swaps and material impact of the swaps on dividends. United States SEC: “In the first action, the SEC found 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. In the second action, the SEC found that, from April 2011 to November 2017, PIMCO failed to waive approximately $27 million of advisory fees as required by its agreement with the PIMCO All Asset All Authority Fund. Additionally, until at least 2018, PIMCO did not have adequate written policies and procedures concerning its oversight of advisory fee calculations and related fee waivers. PIMCO has since disbursed to investors the $27 million in fees that should have been waived, plus interest and a performance adjustment.” Corey Schuster, Co-Chief of the Enforcement Division’s Asset Management Unit: “These cases highlight our continued focus on ensuring that firms adequately disclose material information and implement reasonably designed policies and procedures. PIMCO failed to comply with both of these critical obligations.” See below for United States SEC statement.
“ United States SEC Fines $1.8 Trillion PIMCO $9 Million for Wrongly Charging $27 Million Advisory Fees to Investors & Failure to Disclose Use of Interest Rate Swaps & Material Impact of Swaps on Dividends “
United States SEC Secures Fines $1.8 Trillion PIMCO $9 Million for Wrongly Charging $27 Million Advisory Fees to Investors & Failure to Disclose Use of Interest Rate Swaps & Material Impact of Swaps on Dividends
SEC Charges PIMCO for Disclosure and Policies and Procedures Failures
16th June 2023 – The Securities and Exchange Commission today announced that registered investment adviser Pacific Investment Management Company LLC (PIMCO) will pay $9 million to settle two enforcement actions relating to disclosure and policies and procedures violations involving two funds PIMCO advises.
In the first action, the SEC found 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.
In the second action, the SEC found that, from April 2011 to November 2017, PIMCO failed to waive approximately $27 million of advisory fees as required by its agreement with the PIMCO All Asset All Authority Fund. Additionally, until at least 2018, PIMCO did not have adequate written policies and procedures concerning its oversight of advisory fee calculations and related fee waivers. PIMCO has since disbursed to investors the $27 million in fees that should have been waived, plus interest and a performance adjustment.
“These cases highlight our continued focus on ensuring that firms adequately disclose material information and implement reasonably designed policies and procedures,” said Corey Schuster, Co-Chief of the Enforcement Division’s Asset Management Unit. “PIMCO failed to comply with both of these critical obligations.”
In the action concerning PGP, the SEC’s order finds that PIMCO violated Section 206(4) of the Advisers Act and Rule 206(4)-8 and Section 34(b) of the Investment Company Act of 1940. In the action concerning Authority Fund, the SEC’s order finds that PIMCO violated Section 206(4) of the Advisers Act and Rule 206(4)-7. Without admitting or denying the SEC’s findings, PIMCO agreed to a cease-and-desist order and a censure in each action and to pay a combined $9 million penalty.
The SEC’s investigations were conducted by Ronnie Lasky and Manuel Vazquez 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. Brian Fitzpatrick of the Asset Management Unit and Dennis Hamilton and Raymond Wolff of the Division of Economic Risk and Analysis assisted with the PGP investigation. The examination that led to the PGP investigation was conducted by Daniel Jung, Nicholas Mead, Dinah Touny, and Melissa Romic of the SEC’s Los Angeles Regional Office.
Sign Up / Register
Caproasia Users
- Manage $20 million to $3 billion of assets
- Invest $3 million to $300 million
- Advise institutions, billionaires, UHNWs & HNWs
Caproasia Platforms | 11,000 Investors & Advisors
- Caproasia.com
- Caproasia Access
- Caproasia Events
- The Financial Centre | Find Services
- Membership
- Family Office Circle
- Professional Investor Circle
- Investor Relations Network
Monthly Roundtable & Networking
Family Office Programs
The 2025 Investment Day
- March - Hong Kong
- March - Singapore
- July - Hong Kong
- July - Singapore
- Sept- Hong Kong
- Sept - Singapore
- Oct- Hong Kong
- Nov - Singapore
- Visit: The Investment Day | Register: Click here
Caproasia Summits
- The Institutional Investor Summit
- The Investment / Alternatives Summit
- The Private Wealth Summit
- The Family Office Summit
- The CEO & Entrepreneur Summit
- The Capital Markets Summit
- The ESG / Sustainable Investment Summit
