A bond fund giant will shell out $9 million over regulatory accusations around disclosure issues and fee waivers. The pair of cases involves a $1.94-billion-AUM pair of funds and focuses on events from 2011 through 2018.

Emmanuel "Manny" Roman Pimco CEO, Managing Director

On Friday, Corey Schuster, co-chief of the asset management unit within the enforcement division at the U.S. Securities and Exchange Commission (SEC), revealed that Allianz's Pacific Investment Management Company LLC (Pimco profile]) has agreed to settle a pair of SEC enforcement actions. In addition to the penalty, the settlement includes a cease-and-desist order and censure; Pimco neither admitted nor denied the SEC's findings.

"We are pleased to resolve these matters relating to issues which occurred in two funds more than five years ago, and which PIMCO had fully addressed prior to the SEC's investigations," a Pimco spokesperson tells MFWire via an emailed statement.

One of the settlements involves the Pimco All Asset All Authority Fund, a 20-year-old, open-end mutual fund that comes in multiple share classes and had $1.857 billion in AUM on May 31. The SEC alleges that Pimco failed to do about $27 million in promised fee waivers for the fund between April 2011 and November 2017. (The SEC also accused Pimco of not having adequate policies and procedures, until at least 2018, around fee calculations and waivers.)

Pimco has since disbursed those waivers, plus interest and a performance adjustment, to investors in the All Asset All Authority Fund. Now Pimco has agreed to pay a $2.5-million civil money penalty to settle the matter with the regulatory agency.

The other settlement involves the Pimco Global StocksPlus & Income Fund, an 18-year-old, closed-end mutual fund that now has about $83 million in AUM. The SEC alleges that, between September 2014 and August 2016, Pimco didn't adequately disclose the fund's use of interest rate swaps and the resulting impact on the fund's dividend.

Now Pimco has agreed to pay a $6.5-million civil money penalty to settle the matter with the SEC.

"These cases highlight our continued focus on ensuring that firms adequately disclose material information and implement reasonably designed policies and procedures," Schuster states. "PIMCO failed to comply with both of these critical obligations." 

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