U.S. Securities & Exchange Commission
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U.S. Securities and Exchange Commission

Federated Investment Management Company, Federated Securities Corp. and Federated Shareholder Services Company

Latest Action: On August 4, 2010, the SEC announced a distribution of more than $63 million to more than 530,000 investors who were harmed by market timing and late trading in certain Federated mutual funds. The distribution was the first of two disbursements totaling approximately $77 million. A second distribution of more than $13 million to more than 77,000 investors was made on September 21, 2010. Investors can obtain additional information about the distribution process by visiting http://www.federatedfairfundsettlement.com/start.asp or by calling the Fund Administrator, Boston Financial Data Services, Inc., at (888) 850-3536.

Background: On November 28, 2005, the SEC instituted and settled administrative and cease-and-desist proceedings against Federated Investment Management Company, Federated Securities Corp. and Federated Shareholder Services Company. The SEC issued an Order finding that the respondents harmed long-term mutual fund shareholders by allowing undisclosed market timing and late trading by favored clients and an employee. As part of the settlement, the respondents have paid $72 million, consisting of $27 million in disgorgement and $45 million in a civil penalty for distribution to defrauded shareholders. For more information on the SECís action, you can read In the Matter of Federated Investment Management Company, Federated Securities Corp. and Federated Shareholder Services Company at IA-2448 (Nov. 28, 2005).

Under the terms of the SECís order, an Independent Distribution Consultant submitted a Distribution Plan to the SEC to distribute the Fair Fund containing $72 million to injured investors. On December 4, 2009, the SEC published a Notice of Proposed Plan of Distribution and Opportunity for Comment in connection with this matter. On January 28, 2010, the SEC approved the plan. You can read the SECís Order Approving the Distribution Plan.

http://www.sec.gov/divisions/enforce/claims/federatedinvestment.htm


Modified: 10/05/2011