Press Release: SEC Announces $55 Million Fair Fund Distribution to Investors Injured in Banc One Investment Advisors Market Timing Fraud
Banc One Investment Advisors Corporation and its former CEO Mark A. Beeson engaged in fraudulent market timing in One Group mutual funds from 1999 to 2003, failed to charge redemption fees and leaked confidential portfolio data, leading to a $50 million settlement ($10M disgorgement, $40M penalties) and a $55.6 million Fair Fund distribution to over 200,000 injured investors under the Sarbanes-Oxley Act.
Banc One Investment Advisors Corporation (BOIA) and its former CEO Mark A. Beeson settled SEC charges in 2004 for enabling market timing in One Group mutual funds between June 1999 and May 2003, failing to impose required redemption fees on international funds, and improperly disclosing confidential portfolio holdings. BOIA agreed to pay $10 million in disgorgement and $40 million in civil penalties, plus a cease-and-desist order and censure, without admitting or denying guilt. The SEC distributed $55.6 million—totaling the settlement plus interest—to over 200,000 harmed investors, leveraging the Sarbanes-Oxley Act’s new authority to return civil penalties to victims.
Between June 1999 and May 2003, Banc One Investment Advisors Corporation (BOIA) and its former CEO Mark A. Beeson engaged in fraudulent market timing activities within certain One Group mutual funds, allowing select investors to exploit short-term trading opportunities at the expense of long-term holders. The SEC found that BOIA not only permitted this illegal activity but also failed to charge mandatory redemption fees on its international funds and improperly released confidential portfolio holdings to favored clients. In a June 29, 2004 settlement, BOIA consented to pay $10 million in disgorgement and $40 million in civil penalties, accepted a cease-and-desist order and censure, and agreed to implement compliance reforms—all without admitting or denying the allegations. The total settlement, plus accumulated interest, grew into a $55.6 million Fair Fund, which the SEC distributed in August 2007 to more than 200,000 injured investors through administrator Boston Financial Data Services, Inc. This distribution was made possible by the Sarbanes-Oxley Act of 2002, which for the first time allowed civil penalties to be returned to victims, expanding the SEC’s ability to remedy investor harm. The case was part of a broader SEC initiative that, by 2007, had returned over $2.5 billion to defrauded investors nationwide. Investor inquiries were directed to the Fair Fund Administrator or the settlement website established for transparency.
Exhibits & Attached Documents (2)
Extracted insights
- $2.50B $2.5 billion ≥$1B
- $55.60M $55.6 million $10M–$100M
- $55.00M $55 Million $10M–$100M
- $40.00M $40 million $10M–$100M
- $10.00M $10 million $10M–$100M
- company banc one investment advisors corporation
- company boston financial data services, inc.
- company confidential portfolio holdings
- person linda chatman thomsen
- person required redemption fees
- agency returning money to investors marks continuation of sec efforts
- agency sec authority to increase money returned
- agency Securities and Exchange Commission
- person settled order
- SEC Announces $55 Million Fair Fund Distribution
- SEC Announced Distribution of $55.6 Million in Fair Funds
- Banc One Investment Advisors Corporation Agreed to Pay $10 Million in Disgorgement and $40 Million in Civil Penalties
- Linda Chatman Thomsen Said Returning Money to Investors Marks Continuation of SEC Efforts
- Sarbanes-Oxley Act of 2002 Gave SEC Authority to Increase Money Returned
- SEC Distributed More Than $2.5 Billion in Fair Funds
- SEC Brought Proceedings Against BOIA and Mark A. Beeson
- BOIA and Mark A. Beeson Consented to Settled Order
- BOIA Improperly Allowed Market Timing in One Group Funds
- BOIA Failed to Charge Required Redemption Fees
- BOIA Improperly Released Confidential Portfolio Holdings
- BOIA Agreed to Undertake Compliance and Mutual Fund Governance Reforms
- Boston Financial Data Services, Inc. Is Fair Fund Administrator
SEC Announces $55 Million Fair Fund Distribution to Investors Injured in Banc One Investment Advisors Market Timing Fraud FOR IMMEDIATE RELEASE 2007-165 Washington, D.C., August 13, 2007 - The Securities and Exchange Commission today announced the distribution of approximately $55.6 million in Fair Funds to more than 200,000 investors who were harmed by fraudulent market timing in certain Banc One mutual funds (One Group Funds). The Fair Fund resulted from a settled enforcement action in which Banc One Investment Advisors Corporation (BOIA) agreed to pay $10 million in disgorgement and $40 million in civil penalties to settle charges of unlawful market timing. The entire Fair Fund, plus accumulated interest, has been distributed to investors. "Returning money to investors injured by the unlawful market timing in this and other matters marks the continuation of the SEC's efforts to remedy the harm suffered by investors," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. The Sarbanes-Oxley Act of 2002 gave the SEC authority to increase the amount of money returned to harmed investors by allowing civil penalties to be included in Fair Fund distributions. Prior to SOX, only disgorgement could be returned to investors. To date, the SEC has distributed more than $2.5 billion in Fair Funds to injured investors. On June 29, 2004, the SEC brought settled administrative and cease-and-desist proceedings against BOIA and Mark A. Beeson, former President and CEO of One Group Funds. Both consented to the settled order without admitting or denying the SEC's findings. The SEC found that BOIA improperly allowed market timing in One Group Funds between June 1999 and May 2003, failed to charge required redemption fees in One Group Funds' international funds, and improperly released confidential portfolio holdings. In addition to disgorgement and civil penalties, BOIA also consented to a cease-and-desist order and a censure, and agreed to undertake certain compliance and mutual fund governance reforms. The Fair Fund Administrator responsible for distribution is Boston Financial Data Services, Inc. (BFDS). Investor questions regarding the distribution may be directed to BFDS at (800) 261-0282. Information regarding the distribution can also be obtained at the BOIA Web site: http://www.settlementbanconeia.com. # # # For further information, contact: Robert J. Burson Senior Associate Regional Director SEC Chicago Regional Office (312) 353-7428 Additional materials: Distribution Plan Order Approving the Distribution Plan and Appointing an Administrator June 29, 2004 Order Instituting Administrative and Cease-and-Desist Proceedings http://www.sec.gov/news/press/2007/2007-165.htm Home | Previous Page Modified: 08/13/2007
SEC Announces $55 Million Fair Fund Distribution to Investors Injured in Banc One Investment Advisors Market Timing Fraud FOR IMMEDIATE RELEASE 2007-165 Washington, D.C., August 13, 2007 - The Securities and Exchange Commission today announced the distribution of approximately $55.6 million in Fair Funds to more than 200,000 investors who were harmed by fraudulent market timing in certain Banc One mutual funds (One Group Funds). The Fair Fund resulted from a settled enforcement action in which Banc One Investment Advisors Corporation (BOIA) agreed to pay $10 million in disgorgement and $40 million in civil penalties to settle charges of unlawful market timing. The entire Fair Fund, plus accumulated interest, has been distributed to investors. "Returning money to investors injured by the unlawful market timing in this and other matters marks the continuation of the SEC's efforts to remedy the harm suffered by investors," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. The Sarbanes-Oxley Act of 2002 gave the SEC authority to increase the amount of money returned to harmed investors by allowing civil penalties to be included in Fair Fund distributions. Prior to SOX, only disgorgement could be returned to investors. To date, the SEC has distributed more than $2.5 billion in Fair Funds to injured investors. On June 29, 2004, the SEC brought settled administrative and cease-and-desist proceedings against BOIA and Mark A. Beeson, former President and CEO of One Group Funds. Both consented to the settled order without admitting or denying the SEC's findings. The SEC found that BOIA improperly allowed market timing in One Group Funds between June 1999 and May 2003, failed to charge required redemption fees in One Group Funds' international funds, and improperly released confidential portfolio holdings. In addition to disgorgement and civil penalties, BOIA also consented to a cease-and-desist order and a censure, and agreed to undertake certain compliance and mutual fund governance reforms. The Fair Fund Administrator responsible for distribution is Boston Financial Data Services, Inc. (BFDS). Investor questions regarding the distribution may be directed to BFDS at (800) 261-0282. Information regarding the distribution can also be obtained at the BOIA Web site: http://www.settlementbanconeia.com. # # # For further information, contact: Robert J. Burson Senior Associate Regional Director SEC Chicago Regional Office (312) 353-7428 Additional materials: Distribution Plan Order Approving the Distribution Plan and Appointing an Administrator June 29, 2004 Order Instituting Administrative and Cease-and-Desist Proceedings http://www.sec.gov/news/press/2007/2007-165.htm Home | Previous Page Modified: 08/13/2007