In the Matter of First Eagle Investment Management, LLC, et al. Admin. Proc. File No. 3-16823
Oct. 6, 2022
On September 21, 2015, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against First Eagle Investment Management, LLC, a registered investment adviser, and its wholly-owned broker-dealer subsidiary, FEF Distributors, LLC (collectively, the “Respondents”). In the Order, the Commission found that, from January 1, 2008 through March 31, 2004, the Respondents violated federal securities laws by misappropriating approximately $25 million in mutual fund assets to pay for the distribution and marketing of fund shares outside of a written, approved Rule 12b-1 plan. In addition, use of the Funds’ assets to pay for these distribution-related services rendered the Funds’ disclosures concerning payments for distribution-related services inaccurate. The Commission ordered the Respondents to pay a total of $39,747,879.75 in disgorgement, prejudgment interest, and civil money penalties. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, so the penalties, along with the disgorgement and interest, collected could be distributed to those harmed by the Respondents’ conduct described in the Order.
The Order provides for the Respondents to deposit the Fair Fund into an escrow account, acceptable to the Commission staff. The Respondents are responsible for distributing the Fair Fund in accordance with the Order. Tax compliance and any related administrative expenses are the responsibility of the Respondents. The Order requires that the Respondents submit to the Commission staff a final accounting and certification of the disposition of the Fair Fund. See the Commission’s order: Release No. IA-4199.
The Respondents have hired Boston Financial Data Services, Inc. (“Boston Financial”) to assist with the distribution.
On or about November 3, 2017, a total of $30,120,297.93 was distributed to harmed investors pursuant to the Order.
For more information, please contact the Commission:
Office of Distributions