The US Securities and Exchange Commission (SEC) could take legal action against PIMCO over valuations within its Total Return exchange-traded fund (ETF).
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Pacific Investment Management Co. says it received a Wells notice, which means SEC investigators are recommending that the agency take civil action against the company.
Keep in mind that an SEC “Wells Notice” is not an allegation of wrongdoing nor a definite claim that a law was violated. -PIMCO statementThe SEC has been investigating whether the asset manager overstated valuations of mortgage-backed securities held in PIMCO’s Total Return Active ETF.
“The Wells process provides us with our opportunity to demonstrate to the SEC staff why we believe our conduct was appropriate, in keeping with industry standards, and that no action should be taken”. The agency is looking at the fund’s performance disclosures for that period, and at Pimco’s compliance procedures.
The Pimco Income Fund, overseen by Pimco Group Chief Investment Officer Dan Ivascyn who succeeded Gross, continues to see huge investor appetite, posting about $1.4 billion in inflows in July, following about $1.7 billion in inflows in June, according to Pimco’s website.
“We continue to experience a trend of slowing outflows where flows have normalized to levels that are considerably lower than the levels experienced during the “Taper Tantrum” environment of the 2nd and 3rd quarters of 2013″, Pimco, a unit of Germany’s Allianz SE said in a statement.
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BOND was launched in 2012 as the sort of kid brother to the famed bond investor’s Pimco Total Return Fund (PTTRX) fund and provided early investors better returns than its traditional mutual fund parent.
