Sept. 15, 2004 — Three units of Pimco will pay about $21 million to settle federal and state charges that they failed to properly disclose payments made to brokers for selling Pimco funds.
The companies — PA Fund Management LLC, PEA Capital LLC and PA Distributors LLC, all units of German insurer Allianz AG ADS (AZ) — will pay $11.6 million to settle with the Securities and Exchange Commission. Separately, the firms will pay $9 million in a settlement with the California attorney general.
The settlement come two days after the affiliates agreed to pay $50 million to settle charges by the SEC that they defrauded investors by permitting rapid trading in mutual fund shares. In June, the affiliates agreed to pay $18 million to settle charges of improper trading brought by the attorney general of New Jersey.
Regulators said the companies failed to adequately disclose so-called “shelf space” arrangements in which the units directed stock trades to brokerage houses to reward them for selling Pimco funds.