United States of America
In the Matter of
Jon D. Hammes, Albert Gary Shilling, Allan H. Stefl, and Linda F. Stephenson
|ORDER INSTITUTING CEASE-AND-DESIST PROCEEDINGS, MAKING FINDINGS, AND IMPOSING A CEASE-AND-DESIST ORDER PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933 AND SECTION 9(f) OF THE INVESTMENT COMPANY ACT OF 1940|
The Securities and Exchange Commission ("Commission") deems it appropriate to institute cease-and-desist proceedings pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") and Section 9(f) of the Investment Company Act of 1940 ("Investment Company Act") against Jon D. Hammes ("Hammes"), Albert Gary Shilling ("Shilling"), Allan H. Stefl ("Stefl"), and Linda F. Stephenson ("Stephenson") (also referred to collectively as "Respondents").
In anticipation of the institution of these proceedings, Respondents have submitted Offers of Settlement (the "Offers"), which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over them and the subject matter of these proceedings, Respondents consent to the entry of this Order Instituting Cease-and-Desist Proceedings, Making Findings, and Imposing a Cease-and-Desist Order Pursuant to Section 8A of the Securities Act of 1933 and Section 9(f) of the Investment Company Act of 1940.
On the basis of this Order and Respondents' Offers, the Commission finds that1:
1. Hammes, a 55-year-old resident of Mequon, Wisconsin, was an Independent Director of Heartland Group, Inc. ("Heartland Group"), from its inception to 1987, and from 1991 to January 2003. Hammes was also a member of the Audit Committee of Heartland Group during the same periods.
2. Shilling, a 66-year-old resident of Short Hills, New Jersey, was an Independent Director of Heartland Group from 1995 to November 2003. Schilling was also a member of the Audit Committee of Heartland Group during the same period, and was the Chairman of the Audit Committee during the period relevant to this Order.
3. Stefl, a 60-year-old resident of Malibu, California, was an Independent Director of Heartland Group from October 1998 to April 2003. Stefl was also a member of the Audit Committee of Heartland Group during this period.
4. Stephenson, a 62-year-old resident of Milwaukee, Wisconsin, was an Independent Director of the Heartland Group and a member of Heartland Group's Audit Committee from 1993 to October 2003.
1. Heartland Group, Inc. is a Maryland corporation formed in 1986 that maintains its principal place of business in Milwaukee, Wisconsin. Heartland Group has been registered with the Commission as an open-end, management investment company since January 1987. During the period relevant to these proceedings, Heartland Group offered seven different series of mutual funds, including three equity and four fixed income funds. On March 21, 2001, the Commission obtained an order of permanent injunction and other equitable relief against Heartland Group for violations of Sections 30(b)(2), 30(e) and 30(g) of the Investment Company Act and Rules 30b2-1, 30d-1(a) and 30d-1(c) promulgated thereunder, which froze the assets of Heartland Group's High Yield Municipal Bond Fund ("High Yield Fund"), Short Duration High-Yield Municipal Fund ("Short Duration Fund"), and Taxable Short Duration Municipal Bond Fund ("Taxable Fund"). In addition, a receiver was appointed over the three funds, who was authorized to suspend redemptions in, manage, and, if appropriate, liquidate the three funds.
2. Heartland Advisors, Inc. ("Heartland Advisors"), was founded in 1982 and maintains its principal place of business in Milwaukee, Wisconsin. Heartland Advisors has been dually registered with the Commission since June 1983 as an investment adviser and as a broker-dealer, and provides investment advisory and brokerage services to individuals, institutions and retirement plans. In addition, Heartland Advisors manages the mutual fund portfolio series of Heartland Group subject to the authority of, and supervision by, Heartland Group's Board of Directors, and serves as the principal underwriter of Heartland Group's securities. Specifically, Heartland Advisors managed the funds until the Commission obtained an order placing the funds into receivership in March 2001.
3. Heartland Group's Short Duration High-Yield Municipal Fund began operating on July 2, 1997. Its stated investment objective was a high level of federally tax-exempt current income with a low degree of share price fluctuation.
4. Heartland Group's High-Yield Municipal Bond Fund also began operating on July 2, 1997. Its stated investment objective was to maximize after-tax total returns by investing in a high level of federally tax-exempt current income.
1. This matter stems from Heartland Advisors' fraudulent mispricing of the bonds held in Heartland Group's High Yield and Short Duration Funds (collectively, the "Funds"). Heartland Group's Independent Directors failed adequately to assure that those bonds were priced at "fair value" or adequately to monitor and assure the bonds' liquidity. Heartland Group's Board of Directors, including Respondents, approved pricing procedures that charged Heartland Advisors' Pricing Committee with the day-to-day valuation of the Funds' portfolio securities.2 Those procedures stated, in part, that because the Board had previously determined that market quotations for the Funds' securities were not readily available, the Pricing Committee was required to use valuations provided by FT Interactive Data ("Interactive Data") as benchmarks to fair value the Funds' securities and to determine the Funds' daily net asset values per share ("NAVs").3 Members of the Pricing Committee reviewed the valuations provided by Interactive Data daily. The pricing procedures also required the Pricing Committee to review Interactive Data's valuations to ensure they were sufficiently timely and accurate. In those instances where the Funds' portfolio managers believed that Interactive Data's valuations did not reflect the securities' fair value, and where such disagreements could not be resolved with Interactive Data, the pricing procedures directed the portfolio managers to submit the dispute to a quorum of the Pricing Committee for the purpose of making a final, fair value determination. Any time the Pricing Committee made a fair value determination, the Pricing Committee was required to document its reasons for doing so. The pricing procedures also required the Pricing Committee to periodically report to the Board on Interactive Data's performance, and required the Board of Directors to ratify any of the Pricing Committee's fair value determinations at the Board meeting subsequent to any such determination. Despite the Board of Directors' delegation to Heartland Advisors' Pricing Committee of the day-to-day pricing of the Funds' bonds, the Investment Company Act imposed on the Board the ultimate obligation to ensure that the prices of the Funds' securities reflected their fair value.
2. In addition to the Board's ultimate responsibility for pricing the Funds' securities, the Funds' May 1, 2000 Statement of Additional Information ("SAI"), which is incorporated by reference in the Funds' May 1, 2000 prospectus (as supplemented as of June 9, 2000), stated that both Heartland Advisors and Heartland Group's Board of Directors, including Respondents, would, among other things, monitor the issuers of the high yield bonds held in the Funds' portfolios to assess and determine whether the issuers had sufficient cash flow to meet required principal and interest payments, and to assure the continued liquidity of such bonds so that the Funds could meet shareholder redemption requests. The Directors did not, however, adequately monitor the financial liquidity of the bonds' issuers, or the liquidity of the Funds, to assure that the Funds could sell sufficient bonds to meet redemption requests.
3. During the relevant period, the Respondents encountered indications of the increasing illiquidity of the Funds and the mispricing of the securities held by the Funds. These indications included: the deteriorating credit quality and liquidity of the bonds in the Funds' portfolios; the Funds' growing borrowing and cash-flow problems; and Heartland Advisors' failure to sell sufficient bonds to meet redemptions at prices based on valuations provided by Interactive Data. As a result, the Respondents should have known that the prices at which the Funds carried their bonds did not reflect the bonds' "fair value" as required by the Board's pricing procedures, and that the bonds held by the Funds were not sufficiently liquid to meet redemption requests.
4. The Respondents were presented with the first of these indications regarding the Funds' liquidity problems beginning in at least the spring of 2000. At the Board of Directors' April 27, 2000 meeting, Heartland Advisors presented the Respondents with a list of illiquid securities held in the Funds that indicated that almost 18% of the bonds held by the High Yield Fund were illiquid, and 6% of the bonds in the Short Duration Fund were illiquid. At that time, Thomas Conlin, the Funds' co-portfolio manager, represented that, with respect to pricing, Heartland Advisors had been quick to provide Interactive Data with information. Conlin then misrepresented that the securities had been valued very conservatively. Conlin also stated at this time that the Funds were experiencing net redemptions, and that, therefore, they had not purchased any new bonds during the prior six months. Heartland Advisors refused or failed to sell sufficient bonds held by the Funds to meet redemption requests in large part because Heartland Advisors refused or failed to value the Funds' bonds at prices it could expect to receive in a current sale of the bonds. As a result, in order to meet such redemption requests, the Funds were required to borrow substantial amounts on a credit line established in 1999, purportedly for short-term borrowing.
5. In August 2000, the Respondents were presented with additional indications that should have alerted them to the fact that the liquidity problems raised at the April Board meeting had grown considerably worse, and that Heartland Advisors had refused or failed to cure those liquidity problems following the April meeting. In addition, the Respondents were presented with indications that should have alerted them to the fact that the Funds were experiencing pricing problems. For example, at a Board meeting, on August 10, 2000, the Respondents were presented with data reflecting bond sales in the Funds that indicated that the Funds had for some time not sold bonds in sufficient amounts to meet redemptions, and had been borrowing heavily against their credit lines in order to meet redemptions. Prior to the Board's August 10 meeting, the Board's counsel informed the Board that interest on the money borrowed by the Funds to meet redemptions was materially impacting the Funds' returns in a negative way. At the August 10 Board meeting, the Board was informed that redemptions from the High Yield Fund from June 1 to August 10, 2000 totaled approximately $25 million, and redemptions from the Short Duration Fund totaled almost $60 million for that same period. However, Heartland Advisors sold only $8.5 million in bonds out of the High Yield Fund and $28 million in bonds out of the Short Duration Fund between January 1 and August 10, 2000. The High Yield Fund's borrowings were up to $12.2 million, or 18.5% of its assets, at the time of the August 10, 2000 Board meeting, while the Short Duration Fund's borrowings were approximately $12.3 million, or 13.5% of assets, at the same time. The Board was made aware at the August 10 meeting that borrowings were up, that the watch list and list of defaulted securities were growing, and that the only way to reduce the Funds' borrowings was to sell portfolio securities.
6. Also at the August 10, 2000 Board meeting, Conlin admitted in response to a question that "a material percentage of the [High Yield Fund's] portfolio consisted of defaulted or watch list securities" which, combined with the "significant borrowings" utilized to meet redemptions gave rise to "some liquidity risk" which could be exacerbated by year-end tax loss selling. However, in response to another question, Conlin stated to the Board at the meeting that if forced to sell securities that day, he would need to take a discount, but misrepresented that he should be able to sell the bonds in one week in the ordinary course.
7. Respondent Hammes requested that Heartland Advisors prepare a special report for the Board explaining what it was doing to workout distressed securities in the Funds. Other Board members requested a quarterly progress report on the distressed securities, and a plan addressing how Heartland Advisors intended to reduce the credit line and to verify that the Funds' securities were properly priced. In addition, the Respondents requested a report on possible redemption scenarios and their effect on the Funds. The Respondents also directed Conlin to sell securities to reduce the Funds' borrowings. Conlin failed to do so.
8. Respondents never received these reports and, although they did receive limited information, did not take adequate action to ensure that their requests were satisfied. In addition, Conlin failed to sell securities in the seven-day period and tendered his resignation to Heartland Advisors on August 18, 2000.
9. At the next Board meeting on September 11, 2000, the Board was informed that Conlin had resigned and that he had failed to eliminate the Funds' liquidity problems. In fact, the Board learned on September 11 that the percentage of the Funds' securities that were on the defaulted and watch lists, as well as the Funds' borrowings, had grown since the last Board meeting. Further, Paul Beste, Heartland Advisors' Chief Operating Officer, reported to the Board at the meeting that he had done a comparison of another independent pricing service's prices to those being utilized by the Funds. Upon further questioning, Beste stated that, in the aggregate, the High Yield Fund's NAV would have been nearly one dollar lower using the alternative prices than the NAV calculated by Heartland Advisors. He also explained why Heartland Advisors believed that those alternative prices were unreliable. Additionally, Heartland Advisors' CEO misleadingly reported, among other things, to the Board that between $3 million and $4 million of bonds had been sold that day by the High Yield Fund at prices above their carrying value. Beste misrepresented that sales of securities by the Funds had generally been at or very close to Interactive Data's pricing year-to-date.
10. An additional indication of the Funds' deterioration was presented to the Board in late September 2000, when Respondents learned of the Funds' transfer of a group of bonds to the State of Wisconsin Investment Board ("SWIB"). On September 28, 2000, the Board held a special meeting at which Heartland Advisors informed the Respondents that, among other things, a purported sale of some of the Funds' worst bonds to SWIB would take place the next day. The Board was informed of the fact that those bonds would be sold to SWIB at a price below the price at which Interactive Data had been pricing the bonds, and of the implications of the sale of those bonds at the reduced price. In fact, the bonds involved in the SWIB transaction were transferred at prices approximately 50% below the value at which the Funds had been carrying those bonds in the normal course. Moreover, the transaction was only completed because Heartland Advisors' President, William Nasgovitz, personally guaranteed it, and because it included an agreement whereby SWIB could "put" the bonds back to Heartland Holdings, Inc., with a guaranteed annual return of 20%.4 These events, of which the Board knew or should have known, should have indicated that the Funds' bonds were overvalued.
11. In response to a question from one of the Respondents, Heartland Advisors also discussed with the Respondents the possibility of increased redemptions following the SWIB transaction and the announcement of Conlin's resignation, planned for later that day. William Nasgovitz identified various alternatives in that event, including that as a last resort Heartland Advisors might ask the Commission to allow the Funds to suspend redemptions, a drastic measure that should have signaled the seriousness of the liquidity problems facing the Funds. The Respondents had still not received the plans and reports they requested on August 10.
12. On September 28, 2000, Heartland Advisors lowered the values of certain of the Funds' bonds due in large part to the SWIB transaction. This, in turn, reduced the NAV of the High-Yield Fund by 8.2% and the NAV of the Short Duration Fund by 2.1%. As a result, the Funds' NAVs dropped from $8.75 to $8.03 and $9.10 to $8.91, respectively, in one day.
13. Redemptions continued as expected after the SWIB transaction. On October 8, 2000, Nasgovitz informed the Respondents via e-mail that redemptions were continuing and that he was not sure they had seen the full impact. The Funds faced a cash crisis due to the fact that Heartland Advisors refused or failed to sell sufficient bonds held by the Funds to meet redemption requests, in large part because Heartland Advisors refused to value and sell the Funds' bonds at prices it could reasonably expect to receive in a current sale of those bonds (fair value).
14. On October 12, 2000, the Board called another special meeting. At that meeting, Heartland Advisors informed the Respondents that 59% of the Short Duration Fund's bonds, and 74% of the High Yield Fund's bonds, were now identified as defaulted or watch list, and therefore illiquid, securities. The Funds' new portfolio manager explained to the Respondents that further credit deterioration in the portfolios was likely and that there was little, if any, market for the bonds still held by the Funds. He estimated that the Funds' fair value was approximately 70% of their then-current NAVs, which were based on Interactive Data's prices. At Respondents' request, Counsel for the Board also advised the Respondents of the Funds' duty to price securities daily and the Board's duty in that regard. Counsel also advised Respondents that, in light of the new portfolio manager's review and the limited success selling bonds, the Pricing Committee should reconsider using Interactive Data's prices to fair value the Funds' securities.
15. The Board's counsel discussed, with the Chairperson of the Pricing Committee present, that the fair value of the Funds' portfolio securities must be determined based on a consideration of all relevant factors and available information. Respondents directed the Pricing Committee to follow the Board's pricing policies and procedures. However, the respondents failed to instruct the Pricing Committee not to use Interactive Data's prices as benchmarks to calculate the fair values of the Funds' bonds. The Pricing Committee continued to use Interactive Data's prices to value the Funds' bonds that day, notwithstanding the fact that Interactive Data's prices did not reflect the current fair value of those securities.
16. The next day, Heartland Advisors' CEO, its General Counsel, Board Counsel and others reported to the Board on the Pricing Committee's actions on October 13, but the Board failed to override the Pricing Committee or retroactively correct the October 12 NAVs. The Board's counsel advised them that the likelihood of success of a request to suspend redemptions would be very low. However the Board allowed Heartland Advisors to seek permission from the Commission to authorize the Funds to suspend redemptions instead of "fair valuing" each bond held in the portfolio. At the same time, the Board also directed the Pricing Committee to price the bonds at fair value if the Commission denied Heartland Advisors' request to suspend redemptions. On October 13, the Commission's Division of Investment Management indicated that it would oppose any application for any order that would permit the Funds to suspend redemptions. As a result, the Pricing Committee purported to price the bonds at fair value.
17. Consequently, on October 13, 2000, the Pricing Committee finally proceeded to reprice the bonds. However, the Pricing Committee did not price the bonds on an individual basis at fair value. The Pricing Committee obtained from the Funds' portfolio managers their best estimates of the fair value of each bond held by the Funds. The prices provided by the portfolio managers were materially lower than the prices at which the Funds were carrying their bonds. The Pricing Committee then applied uniform reductions, or "haircuts," of 50% and 33%, respectively, to the proposed prices they were provided by the portfolio managers for bonds in the Funds. The result of Heartland Advisors' arbitrary pricing actions was to decrease the NAV of the High Yield Fund by an additional 69.4%, from $8.01 to $2.45, and the NAV of the Short Duration Fund by an additional 44.0%, from $8.70 to $4.87, from the previous day's NAVs.
18. Respondents' review of Heartland Advisors' improper devaluation of the Funds' bonds on October 13, 2000 was inadequate because they did not identify Heartland Advisors' failure to follow the Board's pricing policies or their failure to price the bonds at fair value as they were required to do. On October 16, 2000, the Board met to discuss the Pricing Committee's actions of October 13. Heartland Advisors' CEO, its General Counsel, Board counsel, members of the Pricing Committee and others informed the Respondents that the Funds' portfolio managers had suggested fair value prices for each of the bonds held by the Funds, but that the Pricing Committee then applied the additional, across-the-board haircuts to those prices based on, among other things, the Funds' internal liquidity problems unrelated to any particular bond or market event that would have effected all bonds equally. The Board was also informed that the Pricing Committee adjusted this discount with respect to bonds that the portfolio managers expressed confidence could be sold currently at a higher value based on recent bids, indications, or other information. However, Heartland Advisors applied the across-the-board haircuts without determining whether such a haircut was appropriate for each portfolio security on October 13, 2000 and did not review and adjust prices to result in fair values for each bond. This was in direct violation of the Board's pricing procedures, which required the Pricing Committee to "fair value" all debt securities held by the Funds when, as here, market quotations for those securities were not readily available. Moreover, the Pricing Committee failed to document the basis for each of the new values assigned by the Pricing Committee, also required by the Board's pricing procedures. Nevertheless, the Respondents did not take adequate steps to remedy the situation.
19. As a result of Respondents' negligent conduct, both before and after October 13, 2000, the Funds redeemed millions of shares in the Short Duration and High Yield Funds at incorrect NAVs.
1. Based on the foregoing, Respondents violated Sections 17(a)(2) and 17(a)(3) of the Securities Act because they did not adequately monitor the liquidity of the bonds in the Funds' portfolios and to assure the continued liquidity of such bonds so the Funds could meet shareholder redemption requests. Respondents expressly undertook these duties in the Funds' SAI, which was incorporated into the Funds' prospectus. The Funds therefore sold shares in the Funds pursuant to an SAI and prospectus that contained an untrue statement of material fact that they knew or should have known to be untrue.
2. In addition, Respondents committed violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act because they did not adequately discharge their responsibility to participate meaningfully in the valuation of Funds. While mutual fund directors are permitted to delegate some responsibility for pricing a fund's securities to a separate committee, each director retains responsibility to be involved in the valuation process and may not passively rely on securities valuations provided by such a committee. See In the Matter of Hartl and Lipman, Release No. IC-19840, 1993 WL 468571, at *4-5 (Nov. 8, 1993). Furthermore, a director's failure to review financial statements, reports, contracts, and other documents relevant to the financial condition of the issuers of a fund's securities can result in the director's personal liability. Id. Here, the Respondents failed to take adequate steps to follow up on their requests for information from Heartland Advisors, when they were on notice of the problems with the prices of the Funds' securities, in order to assure that the Funds' securities were priced at fair value. Further, Respondents committed violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act by permitting and not rectifying the haircut Heartland Advisors applied to the Funds on October 13, which Respondents knew or should have known resulted in prices that did not represent the fair values of the bonds affected.
3. Based on the foregoing, Heartland Advisors violated Rule 22c-1(a), promulgated pursuant to Section 22(c) of the Investment Company Act. Rule 22c-1(a) provides that no registered investment company issuing any redeemable security, no person designated in such issuer's prospectus as authorized to consummate transactions in any such security, and no principal underwriter of or dealer in any such security shall sell, redeem, or repurchase any such security except at a price based on the current NAV of such security. Under Section 2(a)(41) of the Investment Company Act and Rule 2a-4 thereunder, current NAV calculations must be based on current market value or, if market quotations are not readily available, fair value as determined in good faith by the board of directors. Heartland Advisors, the investment adviser of the Funds and the principal underwriter of Heartland Group's securities, violated Rule 22c-1(a) by selling, redeeming and repurchasing Fund shares at NAVs calculated using bond prices that were not based on the bonds' fair value as determined in good faith, as discussed above, which resulted in incorrect NAVs for the Funds.
4. The Commission's Accounting Series Release Nos. 113 and 118, published in 1969 and 1979, respectively, provide guidance regarding pricing issues and factors that should be considered when fair valuing portfolio securities. As a general principle, the fair value of a portfolio security is the price that the fund might reasonably expect to receive for the security upon its "current sale." Funds must apply external factors to determine, on a daily basis, the amount a fund could reasonably expect to receive in a current sale for each security in the fund's portfolio. Ascertaining fair value requires a determination of the amount that an arm's-length buyer, under the circumstances, would currently pay for each security.5 Here, Heartland Advisors failed to set prices for the bonds which reflected their fair value in a current sale and applied an inappropriate haircut which resulted in inaccurate NAVs for the Funds.
5. Respondents were a cause of Heartland Advisors violation of Rule 22c-1(a). The Commission can compel any person to cease and desist from committing or causing a primary violation of the Investment Company Act, or any rule or regulation promulgated thereunder, if that person is, was, or would be a cause of the primary violation due to an act or omission the person knew or should have known would contribute to such primary violation. Here, Respondents failed to expressly instruct Heartland Advisors to disregard Interactive Data's prices, or to correct the prices of the Funds' bonds, when they knew or should have known that those prices did not reflect the bonds' fair value, and consequently knew or should have known that Heartland Advisors was selling, redeeming and repurchasing shares of the Funds at prices that were not based on the Funds' current NAVs. As a result, Respondents were a cause of Heartland Advisors' violation of Rule 22c-1(a) promulgated under Section 22(c) of the Investment Company Act by permitting Heartland Advisors to sell, redeem and repurchase fund shares at a price not based on the Funds' current NAVs.
In view of the foregoing, the Commission deems it appropriate to accept the Offers submitted by the Respondents and impose the sanctions specified in the Offers.
Accordingly, it is hereby ORDERED:
Pursuant to Section 8A of the Securities Act and Section 9(f) of the Investment Company Act, that Respondents Jon D. Hammes, Albert Gary Shilling, Allan H. Stefl, and Linda F. Stephenson cease and desist from committing or causing any violations and any future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act, and cease and desist from causing any violations and any future violations of Rule 22c-1(a) promulgated pursuant to Section 22(c) of the Investment Company Act.
By the Commission.
Jonathan G. Katz
1 The findings herein are made pursuant to Respondents' Offers of Settlement and are not binding on any other person or entity in this or any other proceeding.
2 Specifically, the Pricing Committee was charged with the responsibility for valuation of the Funds' portfolio securities, and implementation and administration of the Board of Directors' procedures for valuing such securities. During the relevant period, Heartland Advisors' General Counsel was the Chairperson of the Pricing Committee and its membership typically consisted of representatives of portfolio management, trading, Heartland Group, Inc.'s Accounting Department, and Paul Beste, Heartland Advisors' Chief Operating Officer.
3 Heartland Advisors assigned carrying values to the bonds in the Funds based on the valuations provided by Interactive Data.
4 Heartland Holdings, Inc. is the parent company of Heartland Advisors, Inc. As of the close of business on August 3, 2000, all of the stock of Heartland Advisors was exchanged for stock in Heartland Holdings, Inc. As a result of the transaction, Heartland Advisors became a wholly owned subsidiary of Heartland Holdings, Inc.
5 Fair value cannot be based on what a buyer might pay at some later time, such as when the market ultimately recognizes the security's true value as currently perceived by the portfolio manager. Funds also may not fair value portfolio securities at prices not achievable on a current basis on the belief that the fund would not currently need to sell those securities.
|Home | Previous Page||