SEC Returns $2 Billion to Defrauded Investors
For the first time ever, the SEC said it has distributed more than $2 billion to investors who lost money through a number of illegal schemes.
In 2009, distributions to injured investors have been made in 31 cases brought by the commission involving illegal conduct ranging from accounting fraud to pump-and-dump schemes to mutual fund market timing. Among the distributions this year were more than $840 million to approximately 257,000 injured AIG investors, more than $320 million to approximately two million injured investors in Alliance Capital mutual funds, and more than $240 million to approximately 700,000 injured Bear Stearns investors.
The SEC reached the $2 billion milestone with the Nov. 20 distribution of more than $40 million related to an illegal late trading scheme involving Ritchie Capital Management, the agency said.
In 2002, the Sarbanes-Oxley Act authorized the SEC to create funds, called Fair Funds, comprised of both civil penalties and ill-gotten gains that could be returned to defrauded investors. Approximately $6.6 billion has been distributed.