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Rating:Judge Approves IDC-Heartland Settlement Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, July 1, 2004

Judge Approves IDC-Heartland Settlement

by: Sean Hanna, Editor in Chief

The long saga of bond-fund mispricing at Heartland is almost over. U.S. District Judge J.P. Stadtmueller accepted a settlement Thursday that ends the litigation over losses in the Heartland bond funds brought against Interactive Data Corp. A second defendant, PricewaterhouseCooper (PwC), is not a part of the settlement.

The suit was brought against the two service providers to Heartland after two Heartland funds suffered one-day losses of 69 percent and 44 percent respectively in October 2000. Interactive Data Corp. provided pricing for the funds' bond holdings and PwC acted as the funds' accountants.

The terms of the settlement call for shareholders in Heartland High-Yield Municipal Bond Fund to receive an estimated 2 cents a share while those in Heartland Short Duration High-Yield Municipal Fund should get a penny per share. All counted, the settlement should reach $1 million, with $250,000 going to plaintiff's attorney fees and $45,000 in expenses.

The plaintiffs also alleged in the suit that Heartland executives used their knowledge of the mispricing to sell shares of the funds prior to the markdown.

The SEC collected a $14 million settlement from Heartland Advisors in 2002. 

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