SEC Charges Transamerica Entities $97 Million Over Faulty Investment Models
The Securities and Exchange Commission (SEC) announced that it charged four Transamerica entities $97.6 million for its misconduct in misleading retail investors with faulty investment models.
The SEC found that the faulty models developed and used by AEGON USA Investment Management LLC, affiliated advisers Transamerica Financial Advisors Inc. and Transamerica Asset Management Inc., and affiliated broker-dealer Transamerica Capital Inc. contained a number of errors and failed to work in the way that investors were promised. The affected companies reportedly invested billions of dollars into strategies and mutual funds that used this faulty model, and when the issues were discovered, the investment companies simply stopped using the models without first informing the investors of the errors or changes in models.
“Investors were repeatedly misled about the quantitative models being used to manage their investments, which subjected them to significant hidden risks and deprived them of the ability to make informed investment decisions,” Co-Chief of the SEC Enforcement Division’s Asset Management Unit C. Dabney O’Riordan said in a press release.
The four Transamerica entities agreed to settle the charges without admitting or denying the findings, and will pay a $36.3 million penalty, $53.3 million in disgorgement, and $8 million in interest to the affected investors through a fair fund. In addition to the $97.6 million charges, former AEGON USA Investment Management LLC Global Chief Investment Officer Bradley Beman and former AEGON USA Investment Management LLC Director of New Initiatives Kevin Giles were charged as the cause of some of these violations. Beman was charged $65,000 and Giles was charged $25,000 in penalties for their failure to take reasonable steps to ensure the models worked as intended and for contributing to the company’s compliance failings.
If you lost money after being misled by a broker or investment agency, you may be able to recover some or all of your losses by filing a claim. Our investment fraud lawyers at Meyer Wilson have represented thousands of investors since we first opened our doors nearly two decades ago, and we understand what it takes to secure the verdict or settlement you require. Through our efforts, we have secured more than $350 million in verdicts and settlements, and we continue to fight for the rights of our clients every day. Schedule a free consultation with a member of our firm through our online form, or call us at (888) 390-6491 to discuss your situation over the phone today.