SEC Announces $103 Million Fair Fund Distribution to Investors Injured by Market Timing Involving Banc of America Capital Management and Affiliates
FOR IMMEDIATE RELEASE
Washington, D.C., June 18, 2008 — The Securities and Exchange Commission today distributed more than $103 million to investors who lost money because of mutual fund market timing and late trading involving Banc of America Capital Management LLC (BACAP) and several of its affiliates.
The distribution is the first in a series that will return approximately $375 million to more than 1.5 million harmed investors and more than 525 affected funds as part of the Commission's 2005 settlement with BACAP, BACAP Distributors LLC, and Banc of America Securities LLC. The firms had been charged with facilitating market timing and late trading in Nations Funds mutual funds and others.
"Today's distribution demonstrates the Commission's commitment to returning money from wrongdoers to investors under the Fair Fund provisions of the Sarbanes-Oxley Act of 2002," said Dick D'Anna, Director of the SEC's new Office of Collections and Distributions. "Our new office has been working to cut red tape and administrative costs and enhance the Commission's increasing success at using our new authority to provide financial relief to investors harmed by market timing or any other unlawful conduct in our markets."
The Sarbanes-Oxley Act gave the SEC new authority to distribute financial penalties paid by securities law violators directly to injured investors. Using this authority, the SEC already has distributed more than $3.9 billion in Fair Funds. Earlier this year, the SEC created the new office to further expedite Fair Fund distributions to harmed investors.
Today's distribution went to more than 130,000 harmed investors in the Nations Funds and more than 380 unaffiliated mutual funds. Kay Lackey, Associate Regional Director of the SEC's New York Regional Office, said, "We are very pleased to begin the distribution of the Banc of America Fair Fund to investors harmed by market timing misconduct. This distribution further demonstrates the Commission's commitment to use disgorgement and penalties from those who violate the securities law to return money to injured investors."
The SEC brought and settled public administrative and cease-and-desist proceedings in 2005 against BACAP, BACAP Distributors and BAS. Each consented to a Commission Order charging anti-fraud violations without admitting or denying the Commission's findings. The Commission ordered the respondents to pay $250 million in disgorgement and $125 million in civil penalties for distribution through a Fair Fund. In addition to disgorgement and civil penalties, the respondents also consented to a cease-and-desist order and a censure, and agreed to undertake certain compliance and mutual fund governance reforms.
The Fair Fund Administrator responsible for distribution is Rust Consulting, Inc. Investor questions regarding the distribution may be directed to Rust at (866) 730-8148.
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Order Approving the Distribution Plan:
February 9, 2005 Order Instituting Administrative and Cease-and-Desist Proceedings:
For more information, contact:
Kay Lackey, Associate Regional Director
Gerald Gross, Assistant Regional Director
SEC's New York Regional Office