Friday, October 9, 2015

Investigations of Fund Fees (and Fees and Fees)

With the Blackstone settlement from earlier this week (see below), now is as good a time as any to start a list of investigations into fund fees.  If we're missing any, let us know!
  1. April 2018: A.G. Schneiderman Releases New Report On Mutual Fund Fees, Announces Agreement By 13 Major Firms: "NEW YORK – Attorney General Eric T. Schneiderman announced that after an industry-wide investigation into mutual fund disclosures and fees, 13 major mutual fund firms—including those run by some of the largest players in the mutual fund industry—have agreed to voluntarily publish important information about their mutual funds to all retail investors."

  2. April 2017: SEC Charges Credit Suisse and Former IA Representative With Breaches of Fiduciary Duty: "The [SEC] today announced that [Credit Suisse] and one of its former investment adviser representatives have agreed to pay almost $8 million to settle charges that they improperly invested clients in more expensive “Class A” shares of mutual funds rather than less expensive “institutional” shares for which they were eligible. The SEC’s orders find that Credit Suisse and Sanford Michael Katz breached their fiduciary duties and failed to adequately disclose the conflict of interest created by such investments as they enriched themselves at their clients’ expense."

  3. September 2016: ING Bank compensates Living Super customers due to potentially misleading costs and fees statements

  4. August 2016: SEC fines Wilbur Ross firm $2.3 million over fees: “Billionaire investor Wilbur Ross' investment firm WL Ross & Co agreed on Wednesday to pay a $2.3 million fine to the Securities and Exchange Commission to settle charges that it did not properly disclose some fees it charged investors."

  5. August 2016: Apollo to Pay $52.8 Million Over Fee Practices: “A common theme in our recent enforcement actions against private-equity firms is their failure to properly disclose fees and conflicts of interest to fund investors,” said Andrew J. Ceresney, director of the SEC Enforcement Division.

  6. August 2016: Suits Target University Retirement Plans: "Many of the cases challenge 403(b) plans’ use of retail share classes of mutual funds, rather than lower-cost institutional versions of the same investments. They also contend that the plans’ arrangements with multiple record keepers cause participants to pay excessive administrative fees"

  7. August 2016: SEC Probes Silver Lake Over Fees: "Investigation is part of regulator’s broad push to make sure buyout firms are being upfront with investors"

  8. July 2016: Investors Are Getting Ripped Off on Index Fund Fees, Lawsuits Say 

  9. Feb. 2016: George K. Baum Overcharged School District, Regulator Says: “Municipal-bond underwriter George K. Baum & Co. agreed to pay a $100,000 fine over allegations it charged a school district four times the typical fee to sell debt, in part to help cover the cost of bond elections, a regulator of securities dealers said.”

  10. Jan. 2016: SEC: Alternative Fund Manager Overcharged Fees, Misled Investors 

  11. Oct. 2015:  Blackstone to pay about $39 million to settle SEC charges over fees: the payments Blackstone received "essentially reduced the value of the portfolio companies prior to sale, to the detriment of the funds and their investors."

  12. Sept. 2015: CalPERS: Tensions rise over private equity fees

  13. Aug. 2015: Private equity industry sees more federal regulation: OICE...examiners had turned up widespread "deficiencies" in how private equity firms charge clients for fees and expenses and the agency had found "violations of law or material weaknesses in controls over 50% of the time."

  14. June 2015: Earlier this year, a senior executive of the California Public Employees’ Retirement System, the country’s biggest state pension fund, made a surprising statement: The fund did not know what it was paying some of its Wall Street managers.

  15. April 2015: N.J. pension fund heads to investigate investment fees and bonuses to private companies.

  16. Dec. 2014: Two of the biggest private-equity firms are disclosing fees that had largely been hidden as U.S. regulators demand increased transparency from the industry.

  17. Dec. 2014: With private equity firms under the regulatory microscope, the balance of power may be shifting — at least a bit — away from fund executives and toward investors.

  18. Nov. 2014: Blackstone Group, which manages $279 billion, no longer will pocket extra consulting fees when selling or taking public companies it owns.

  19. Sept. 2014: SEC reviews completed as part of a two-year effort involving nearly 200 funds have found cases where potential investors were given only the most favorable description of past performance rather than full disclosure of winning and losing bets.

  20. July 2014: Federal regulators are looking at commissions that buyout firms receive for helping companies they control get goods and services at discount prices, as part of a stepped-up probe of private-equity fees.

  21. May 2014: The Deal’s Done. But Not the Fees: “In some instances, investors’ pockets are being picked,”

  22. May 2014: BlackRock faces lawsuits over “disproportionately large” fees.

  23. May 2014: The SEC found illegal fees or severe compliance shortfalls in more than half of the firms it examined since starting a review of the $3.5 trillion industry two years ago.

  24. April 2014: More than half of about 400 private-equity firms that SEC staff have examined have charged unjustified fees and expenses without notifying investors,

  25. March 2014: Muni Investors Getting Fleeced On Trading Costs: Investors typically pay twice as much in trading commissions for municipal bonds as they would pay for corporate bonds.

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