SEC Announces Distribution of $60 Million Fair Fund to MBIA Investors Harmed by Accounting Fraud
FOR IMMEDIATE RELEASE
Washington, D.C., March 27, 2009 — The Securities and Exchange Commission today announced the distribution of the $60 million Fair Fund created as part of a settled SEC enforcement action against MBIA Inc. in 2007.
The funds were distributed to approximately 20,000 investors who purchased MBIA's securities from Sept. 11, 1998, through Nov. 22, 2004.
The Sarbanes-Oxley Act of 2002 gave the SEC authority to increase the amount of money returned to injured investors by allowing civil penalties to be included in Fair Fund distributions. Prior to SOX, only disgorgement could be returned to investors.
"The SEC has returned more than $4 billion in Fair Funds to investors since the 2002 passage of the Sarbanes-Oxley Act," said Scott Friestad, Deputy Director of the SEC's Division of Enforcement. "The MBIA Fair Fund is the latest example of our continuing commitment to returning disgorgement and penalties to investors harmed by violations of the securities laws."
James Clarkson, Acting Regional Director of the SEC's New York Regional Office, added, "Returning money to harmed investors is an important part of our function as the investor's advocate, and Fair Fund distributions will continue to be a foremost priority for the Commission."
In its settlement with the SEC, MBIA agreed to pay a penalty of $50 million for distribution through a Fair Fund. The Fair Fund also includes MBIA's payment of $10 million in disgorgement and restitution under an Assurance of Discontinuance entered into by the Office of the Attorney General of the State of New York and MBIA.
Investors can obtain additional information about the distribution process by visiting the Fair Fund Website: www.MBIAfairfundsettlement.com.
# # #