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Pacific Investment Management Company LLC (PIMCO) was ordered Friday to pay the Securities and Exchange Commission $9 million to settle two enforcement actions involving two funds PIMCO advises.

In the first action, the SEC found that, from September 2014 to August 2016, PIMCO failed to disclose material information to investors concerning the use by PIMCO Global StocksPLUS & Income Fund (PGP) of interest rate swaps and the material impact of the swaps on PGP’s dividend.

In the second action, the SEC found that, from April 2011 to November 2017, PIMCO failed to waive approximately $27 million of advisory fees as required by its agreement with the PIMCO All Asset All Authority Fund.

Without admitting or denying the SEC’s findings, PIMCO agreed to a cease-and-desist order and a censure in each action and to pay a combined $9 million penalty.

Further, the agency said that until at least 2018, “PIMCO did not have adequate written policies and procedures concerning its oversight of advisory fee calculations and related fee waivers. PIMCO has since disbursed to investors the $27 million in fees that should have been waived, plus interest and a performance adjustment.”

Corey Schuster, co-chief of the Enforcement Division’s asset management unit, said in a statement: “these cases highlight our continued focus on ensuring that firms adequately disclose material information and implement reasonably designed policies and procedures.”

PIMCO, Schuster said, “failed to comply with both of these critical obligations.”

PIMCO said Friday in a statement that it is “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.”

In the action concerning PGP, the SEC’s order finds that PIMCO violated Section 206(4) of the Advisers Act and Rule 206(4)-8 and Section 34(b) of the Investment Company Act of 1940.

In the action concerning Authority Fund, the SEC’s order finds that PIMCO violated Section 206(4) of the Advisers Act and Rule 206(4)-7.

Melanie Waddell

@Think_MelanieW

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