Federated Investment Management Company, Federated Securities Corp. and Federated Shareholder Services Company

On November 28, 2005, the SEC instituted and settled administrative and cease-and-desist proceedings against Federated Investment Management Company, Federated Securities Corp., and Federated Shareholder Services Company. The SEC issued an Order finding that the respondents harmed long-term mutual fund shareholders by allowing undisclosed market timing and late trading by favored clients and an employee. As part of the settlement, the respondents have paid $72 million, consisting of $27 million in disgorgement and $45 million in a civil penalty for distribution to defrauded shareholders. For more information on the SEC's action, you can read In the Matter of Federated Investment Management Company, Federated Securities Corp. and Federated Shareholder Services Company at IA-2448 (Nov. 28, 2005).

Under the terms of the SEC's order, an Independent Distribution Consultant (IDC) must submit a Distribution Plan to the SEC to distribute the Fair Fund containing $72 million to injured investors. An IDC has been appointed and is developing a distribution plan. Once the IDC completes the Distribution Plan,�notice of the proposed Distribution Plan must be published for at least 30 days, specifying how copies of the proposed Distribution Plan may be obtained, and describing the process by which persons may comment on the Plan. A link to that Notice will be provided on this website and the Notice shall be published in the SEC Docket. 

http://www.sec.gov/divisions/enforce/claims/federatedinvestment.htm