The Securities and Exchange Commission said Monday that it has reached settlements with US subsidiaries of AEGON, under which the global asset manager agreed to pay approximately $98 million over errors related to an asset allocation models used on a series of Transamerica funds.
The was launched after Aegon had discovered errors in certain investment strategies developed by a former portfolio manager of Aegon USA Investment Management, LLC and offered through Transamerica mutual funds.
Aegon is a multinational life insurance, pensions and asset management company headquartered in Netherlands.
The investigation process had been going on for several years as the watchdog had also concerns about whether the Dutch insurer had made appropriate disclosures to clients.
It further explains: “The SEC’s order finds that the models, which were developed solely by an inexperienced, junior AUIM analyst, contained numerous errors, and did not work as promised. The SEC found that when AUIM and TAM learned about the errors, they stopped using the models without telling investors or disclosing the errors. “
Aegon revealed in its latest financial statements that it had set aside €85 million to settle the probe. The $350 billion asset manager said AUIM was dropped as subadvisor on the mutual funds in April 2015 and the remaining portfolios two months later.
The said AEGON did not admit or deny wrongdoing in agreeing to pay the civil fine, which included “$53.3 million in disgorgement, $8 million in interest, and a $36.3 million penalty.” The SEC will create and administer a fair fund to distribute the entire $97.6 million to affected investors.
Separately, the SEC fined AUIM’s former executives who were the cause behind AUIM’s violations. Chief Investment Officer, Bradley Beman, and AUIM’s former Director of New Initiatives, Kevin Giles, were fined $65,000 and $25,000 respectively.
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