Strong Capital Management, et al.

On May 20, 2004, the SEC instituted and settled administrative and cease-and-desist proceedings against Strong Capital Management, Inc., Richard Strong, and other entities and individuals. Among other things, the SEC alleged that Strong, entities he controlled, or others improperly: allowed and failed to disclose market timing in the Strong Fund complex; released confidential portfolio holdings; made misleading prospectus disclosures; and in Strong’s case, market-timed his own funds. As part of the settlement, the respondents were ordered to pay a total of more than $140 million in disgorgement of ill-gotten gains and civil penalties for distribution to defrauded shareholders. 

For more information on the SEC's action, you can read In the Matter of Strong Capital Management, Inc., Strong Investor Services, Inc., Strong Investments, Inc., Richard S. Strong, Thomas A. Hooker, Jr. and Anthony J. D'Amato at IA-2239 (May 20, 2004).

Under the terms of the SEC's order, the independent distribution consultant (IDC) retained by Strong Capital Management (SCM) must submit a Distribution Plan to the SEC to distribute the Fair Fund containing $140,750,000 million, plus accumulated interest, to injured investors. The IDC has submitted his proposed plan to the SEC staff in Chicago and Washington, DC, and the staff is currently reviewing the plan to ensure that it treats investors fairly and is consistent with the SEC’s Order.

If the staff is satisfied with the plan, it will send it to the Commission with a recommendation to publish the plan for notice and comment. 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. After publication and investors have an opportunity to comment, the plan will be submitted to the Commission for approval to make distribution to shareholders.

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