Press Release: SEC Announces $37 Million Fair Fund Distribution to Mutual Fund Investors Injured by Columbia Market Timing Fraud
Columbia Management Advisors and Columbia Funds Distributor committed market timing fraud between 1998 and 2003 by allowing undisclosed rapid trading that harmed mutual fund investors, leading to a $140 million SEC settlement ($70M disgorgement, $70M penalties), with $37 million distributed to over 300,000 investors as the first of four planned payouts.
In 2005, the SEC settled enforcement actions against Columbia Management Advisors, Inc. and Columbia Funds Distributor, Inc., which consented to charges of anti-fraud violations for permitting undisclosed market timing in the Columbia Funds from 1998 to 2003. The firms agreed to pay $70 million in disgorgement and $70 million in penalties, totaling $140 million, to be distributed via a Fair Fund to over 600,000 injured investors. On July 2, 2007, the SEC made its first distribution of $37 million to more than 300,000 affected account holders, with four additional distributions planned to complete the process.
Between 1998 and 2003, Columbia Management Advisors, Inc. and Columbia Funds Distributor, Inc. engaged in fraudulent market timing by allowing undisclosed rapid trading in the Columbia Funds, which diluted returns for long-term investors and violated anti-fraud provisions. In 2005, the SEC brought administrative and cease-and-desist proceedings against both firms, which settled without admitting or denying guilt and agreed to pay $70 million in disgorgement and $70 million in penalties, totaling $140 million for a Fair Fund. On July 2, 2007, the SEC announced the first distribution of $37 million to over 300,000 affected investors, marking the initial payout from this fund. The Fair Fund is expected to make approximately four more distributions to reach the full $140 million, benefiting more than 600,000 Columbia Funds account holders. The SEC emphasized this effort as part of its broader initiative to return penalties to harmed investors, having already distributed over $1.8 billion across similar cases. Investors were directed to the Columbia Fair Fund website and a toll-free number for details on the distribution plan and eligibility. This case underscored the SEC’s commitment to holding fund advisers accountable for practices that undermine the interests of retail investors.
Exhibits & Attached Documents (2)
Extracted insights
- $1.80B $1.8 billion ≥$1B
- $140.00M $140 million $100M–$1B
- $70.00M $70 million $10M–$100M
- $37.00M $37 Million $10M–$100M
- $37.00M $37 million $10M–$100M
- person columbia funds distributor
- company columbia funds distributor, inc.
- company columbia management advisors
- company columbia management advisors, inc.
- person commission order
- person david bergers
- person linda chatman thomsen
- agency Securities and Exchange Commission
- SEC Announces $37 Million Fair Fund Distribution
- SEC Announced $37 Million Fair Fund Distribution
- Columbia Management Advisors, Inc. Entered Arrangements for Undisclosed Market Timing
- Columbia Funds Distributor, Inc. Entered Arrangements for Undisclosed Market Timing
- Linda Chatman Thomsen Said The Commission Has Returned More Than $1.8 Billion to Injured Investors
- David Bergers Said We Are Very Pleased to Begin This Distribution
- The Commission Brought and Settled Public Administrative and Cease-and-Desist Proceedings
- Columbia Management Advisors Consented to Commission Order
- Columbia Funds Distributor Consented to Commission Order
- The Commission Ordered Columbia Respondents to Pay $70 Million in Disgorgement and $70 Million in Penalties
SEC Announces $37 Million Fair Fund Distribution to Mutual Fund Investors Injured by Columbia Market Timing Fraud FOR IMMEDIATE RELEASE 2007-127 Washington, D.C., July 2, 2007 - The Securities and Exchange Commission today announced a $37 million Fair Fund distribution to more than 300,000 investors who were harmed by fraudulent mutual fund market timing in the Columbia Funds between 1998 and 2003. The distribution is the first in a series of disbursements from the Fair Fund that will distribute a total of approximately $140 million to more than 600,000 affected Columbia Funds account holders. The Fair Fund resulted from a Commission enforcement action charging unlawful conduct by Columbia Management Advisors, Inc. (the adviser to the Columbia Funds) and by Columbia Funds Distributor, Inc. (the Fund's underwriter and distributor) by entering or allowing arrangements for undisclosed market timing in the Funds. "The Commission has now returned more than $1.8 billion to injured investors through Fair Fund distributions in multiple cases," said Linda Chatman Thomsen, Director of the Division of Enforcement. "This first distribution from the Columbia Fair Fund marks another significant step in our continuing efforts to distribute fair funds to mutual fund investors." "We are very pleased to begin this distribution to Columbia Funds investors who were injured by market timing," said David Bergers, Director of the Commission's Boston Regional Office, which handled the Columbia matter. "The Columbia Fair Fund allows us to use financial penalties and disgorgement from wrongdoers to return money to harmed investors." In 2005, the Commission brought and settled public administrative and cease-and-desist proceedings against Columbia Management Advisors and Columbia Funds Distributor, which consented to a Commission Order charging anti-fraud violations without admitting or denying the Commission's findings. The Commission ordered the Columbia respondents to jointly pay $70 million in disgorgement and $70 million in penalties for distribution through the Fair Fund. The Commission anticipates that approximately four additional distributions from the Fair Fund will be made to Columbia Funds account holders to complete the distribution process. Investors can obtain additional information about the distribution process, including a copy of the Distribution Plan, by visiting http://www.columbiafairfund.com or by calling the Administrator of the Distribution Plan at (800) 410-5361. # # # For further information contact: David P. Bergers, Regional Director John T. Dugan, Associate Regional Director Celia D. Moore, Deputy Assistant Regional Director Boston Regional Office 617-573-8900 Additional materials: Distribution plan Order Approving the Distribution Plan Order Instituting Proceedings against Columbia Additional Documents and Background http://www.sec.gov/news/press/2007/2007-127.htm Home | Previous Page Modified: 07/02/2007
SEC Announces $37 Million Fair Fund Distribution to Mutual Fund Investors Injured by Columbia Market Timing Fraud FOR IMMEDIATE RELEASE 2007-127 Washington, D.C., July 2, 2007 - The Securities and Exchange Commission today announced a $37 million Fair Fund distribution to more than 300,000 investors who were harmed by fraudulent mutual fund market timing in the Columbia Funds between 1998 and 2003. The distribution is the first in a series of disbursements from the Fair Fund that will distribute a total of approximately $140 million to more than 600,000 affected Columbia Funds account holders. The Fair Fund resulted from a Commission enforcement action charging unlawful conduct by Columbia Management Advisors, Inc. (the adviser to the Columbia Funds) and by Columbia Funds Distributor, Inc. (the Fund's underwriter and distributor) by entering or allowing arrangements for undisclosed market timing in the Funds. "The Commission has now returned more than $1.8 billion to injured investors through Fair Fund distributions in multiple cases," said Linda Chatman Thomsen, Director of the Division of Enforcement. "This first distribution from the Columbia Fair Fund marks another significant step in our continuing efforts to distribute fair funds to mutual fund investors." "We are very pleased to begin this distribution to Columbia Funds investors who were injured by market timing," said David Bergers, Director of the Commission's Boston Regional Office, which handled the Columbia matter. "The Columbia Fair Fund allows us to use financial penalties and disgorgement from wrongdoers to return money to harmed investors." In 2005, the Commission brought and settled public administrative and cease-and-desist proceedings against Columbia Management Advisors and Columbia Funds Distributor, which consented to a Commission Order charging anti-fraud violations without admitting or denying the Commission's findings. The Commission ordered the Columbia respondents to jointly pay $70 million in disgorgement and $70 million in penalties for distribution through the Fair Fund. The Commission anticipates that approximately four additional distributions from the Fair Fund will be made to Columbia Funds account holders to complete the distribution process. Investors can obtain additional information about the distribution process, including a copy of the Distribution Plan, by visiting http://www.columbiafairfund.com or by calling the Administrator of the Distribution Plan at (800) 410-5361. # # # For further information contact: David P. Bergers, Regional Director John T. Dugan, Associate Regional Director Celia D. Moore, Deputy Assistant Regional Director Boston Regional Office 617-573-8900 Additional materials: Distribution plan Order Approving the Distribution Plan Order Instituting Proceedings against Columbia Additional Documents and Background http://www.sec.gov/news/press/2007/2007-127.htm Home | Previous Page Modified: 07/02/2007