Strong Capital Management, et al.
Latest Action: On November 12, 2010, the SEC announced the second in a series of Fair Fund distributions that will return approximately $140 million to affected investors in the Strong family of mutual funds harmed as a result of undisclosed market timing. In this distribution, approximately 149,000 investors will receive more than $32 million. Previously, the SEC distributed more than $83 million to more than 458,000 investors.
Investors can speak to representatives of BNY Mellon Asset Servicing, US Funds Services, formally known as PNC Global Investment Servicing, the Fair Fund Administrator responsible for the distribution, by calling (800) 555-7718. Investors also can obtain information regarding the distribution, including the names of the specific mutual funds affected by the distribution, at http://www.strongsettlement.com.
Background: On May 20, 2004, the SEC instituted and settled administrative and cease-and-desist proceedings against Strong Capital Management, Inc., Richard Strong, and other entities and individuals. Among other things, the SEC alleged that Strong, entities he controlled, or others improperly: allowed and failed to disclose market timing in the Strong Fund complex; released confidential portfolio holdings; made misleading prospectus disclosures; and in Strong’s case, market-timed his own funds. As part of the settlement, the respondents were ordered to pay a total of more than $140 million in disgorgement of ill-gotten gains and civil penalties for distribution to defrauded shareholders.
Under the terms of the SEC's order, an independent distribution consultant retained by Strong Capital Management submitted a plan to the SEC to distribute the Fair Fund containing $140,750,000 million, plus accumulated interest, to injured shareholders. On September 14, 2009, the SEC approved the distribution plan and appointed PNCGIS as Fund Administrator.
For more information on the SEC's action, you can read In the Matter of Strong Capital Management, Inc., Strong Investor Services, Inc., Strong Investments, Inc., Richard S. Strong, Thomas A. Hooker, Jr. and Anthony J. D'Amato at IA-2239 (May 20, 2004).