In the Matter of S&P Dow Jones Indices LLC Admin. Proc. File No. 3-20310
Oct. 12, 2022
On May 17, 2021, the Commission instituted and simultaneously settled cease-and-desist proceedings (the “Order”) against S&P Dow Jones Indices LLC (“S&P” or the “Respondent”). In the Order, the Commission found that S&P, which publishes an index that measures the return from a rolling long position for certain VIX futures contracts, failed to disclose the existence of a feature in this index that kept securities prices static during a period of unprecedented volatility. As a result of this undisclosed feature, values being published and disseminated to the market were not based on the real-time prices of certain VIX futures contracts.
The Commission ordered Respondent to pay a $9,000,000 civil money penalty to the Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty paid can be distributed to harmed investors (the “Fair Fund”). See the Commission’s Order: Release No. 33-10943.
The Fair Fund includes the $9,000,000.00 paid by the Respondent. The Fair Fund has been deposited in an interest-bearing account at the U.S. Department of the Treasury’s Bureau of the Fiscal Service, and any interest accrued will be added to the Fair Fund.
On July 16, 2021, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Fair Fund. See the Commission’s Order: Release No. 34-92424.
On November 2, 2021, the Commission issued an order appointing Epiq Class Actions and Claims Solutions, Inc., as the Fund Administrator to oversee the administration and distribution of the Fair Fund and, set the administrator’s bond amount. See the Commission’s Order: Release No.& 34-93509.
On March 21, 2022, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The notice provides the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-94480 and the Proposed Plan.
The Proposed Plan provides that the distribution of the Fair Fund shall be made to those injured investors who held and/or purchased eligible securities between 4:09:40 p.m. and 5:09 p.m. on February 5, 2018 and suffered a recognized loss as calculated by the methodology used in the plan of allocation in the Plan.
On May 12, 2022, the Commission issued an order approving the Proposed Plan and simultaneously posted the approved plan of distribution (the “Plan”). See the Commission’s Order: Release No. 34-94905 and the approved Plan.
On September 18, 2023, the Commission issued an order approving the disbursement of $9,048,493.23 from the Fair Fund for distribution by the Fund Administrator in accordance with the Plan. See the Commission’s Order: Release No. 34-98414.
For more information, please contact the Fund Administrator: