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REUTERS: Pimco to Pay $20 Million Over Misleading Investors About ETF Performance

ibartman
edited December 2016 in Fund Discussions
As originally posted by Ted -of course!- on Dec 2 2016: http://www.mutualfundobserver.com/discuss/discussion/30451/john-waggoner-pimco-settles-with-sec-for-nearly-20-million

Pacific Management Investment Co (Pimco) will pay $20 million to settle charges it misled investors about the performance of a top exchange-traded fund it manages, U.S. regulators said on Thursday...

The SEC said Pimco overstated the E.T.F.'s value and provided "misleading" reasons for the fund's early success, which was premised on buying small pieces or "odd lots" of mortgaged-backed securities that sell at a discount to larger units.

Comments

  • TedTed
    @ibartman & MFO Members: For what it's worth, here is the Reuters article dated 12/1/16.
    Regards,
    Ted
    http://www.reuters.com/article/us-pimco-sec-idUSKBN13Q5WZ
  • msf
    I thought about posting a comment about this in the Wells Fargo thread, where catch22 asked, is this something that would make you recommend the company?

    Here, PIMCo said that it was just relying upon third party pricing to compute its portfolio's NAV. It offered the usual justification - everyone does it.

    After all what does PIMCo know about pricing bonds?

    It's not the dollar amount that matters. It's the practices of the whole industry, saying that they are okay precisely because they're common. A fast way to sink to the lowest level, and drive that even lower.

    Forget about fiduciary. How about competency?
  • Sven
    PIMCo said that it was just relying upon third party pricing to compute its portfolio's NAV. It offered the usual justification - everyone does it.
    So Pimco is really no better than other shops. $20M fine is small in the overall scheme of things.
  • MOZART325
    Who actually receives the $20 million. Does any of it actually go to the investors who were deceived?
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