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Written by 11:12 pm Blog, Securities Fraud Articles

SEC Charges First Eagle With Improperly Using Mutual Fund Assets

First Eagle Investment Management and FEF Distributors recently settled charges with the Securities and Exchange Commission. The New York based investment advisor and its affiliate agreed to pay $40 million to settle the charges which allege the improper uses of mutual fund assets to pay marketing and distribution of fund shares.

According to a press release, “An SEC investigation found that First Eagle and FEF unlawfully caused the First Eagle Funds to pay nearly $25 million for distribution-related services, rather than making the payments out of the firms’ own assets (known as ‘revenue sharing’).” The money from the settlement will be returned to the account of affected shareholders

The SEC said this is the “first” case in a recent initiative to protect mutual fund shareholders from bearing the cost if fund advisors improperly use fund assets.

“Mutual fund advisers have a fiduciary duty to manage the conflict of interest associated with fund distribution, namely whether to use their own assets or to recommend to their fund’s board to use the fund’s assets to distribute shares,” said Julie M. Riewe, Co-Chief of the SEC Enforcement Division’s Asset Management Unit.

The foregoing information, which is all publicly available, is being provided by The White Law Group.

The White Law Group is a national securities arbitration, securities fraud, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida. If you suffered losses and are concerned about your investments, call the White Law Group at 312-238-9650 for a free consultation.

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Tags: , , , , , , , , Last modified: September 21, 2015