US fund company Pax World settles charges with SEC
WASHINGTON, July 30 |
WASHINGTON, July 30 (Reuters) - Pax World Management Corp, a mutual fund company that touts its socially responsible investment policies, has settled with regulators who charged it violated its own guidelines with investments that included companies that derived income from gambling and liquor.
Without admitting or denying the charges, Pax World settled with the U.S. Securities and Exchange Commission by paying a $500,000 penalty and agreeing to a cease-and-desist order.
New Hampshire-based Pax World was alleged to have bought 10 securities that the SEC said violated its own restrictions on buying shares in companies that derive revenue from the manufacture of weapons, alcohol, tobacco or gambling products.
"Advisers simply cannot tell investors they are going to do one thing with their funds and then not follow through on those promises," said Linda Chatman Thomsen, director of the SEC division of enforcement, in a statement.
Pax World Management handles investments for several Pax World mutual funds.
Between 2001 and 2005, the SEC also said, the investment adviser bought a total of 41 securities for the Pax World Growth (PXWGX.O) and Pax World High Yield (PAXHX.O) funds that were not screened prior to purchase, or about 8 percent of all new purchases for the two funds during the period.
Pax World President and CEO Joseph Keefe said the portfolio managers and others involved with the funds in question are no longer employed by the company.
"We are confident that the steps we have taken ... will help us assure that mistakes of this nature are not made in the future," Keefe said in a statement. (Reporting by Georgina Coolidge; Editing by Brian Moss)
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