Sept. 15, 2004 — The SEC said Bridgeway Capital Management and its president, John Noland Ryan Montgomery, agreed to reimburse fund shareholders to settle a charge related to more than $4.4 million in illegal performance-based fees that Bridgeway charged to three of its mutual funds.

In its investigation, the SEC found that between July 1995 and March 2004, Bridgeway, at Mr. Montgomery’s direction, charged three of its mutual funds — Bridgeway Fund :Aggressive Investors/1 (BRAGX), Bridgeway Fund: Aggressive Investors/2 (BRAIX) and Bridgeway Fund: Micro-Cap Limited Fund (BRMCX) — illegal performance fees totalling more than $4.4 million.

Specifically, the settlement requires that Bridgeway reimburse the affected fund shareholders $4,407,700, plus pre-judgment interest of $458,764, and that Bridgeway and Mr. Montgomery pay penalties of $250,000 and $50,000, respectively.

The settlement agreement also requires Bridgeway to hire experienced compliance personnel to ensure that Bridgeway applies its performance-based fee in accordance with the federal securities laws in the future.

Based in Houston, Bridgeway manages 11 no-load mutual funds with combined net assets of approximately $1.4 billion.

Contact Bob Keane with questions or comments at: bkeane@investmentadvisor.com.