Vanguard “investors were left in the dark about changes that forced them to pay thousands of extra dollars,” in taxes, New York Attorney General Letitia James said in a statement. Credit: EPA-EFE/Shutterstock/Sarah Yenesel
The New York Attorney General and the U.S. Securities and Exchange Commission have secured $106 million from global investment adviser Vanguard Group Inc. over its failure to notify investors of changes to retirement funds that led to higher tax bills.
Attorney General Letitia James, the SEC, and 45 securities regulators from across the country reached a settlement with Vanguard and its subsidiary Vanguard Marketing Corporation after the Malvern, Pennsylvania-based advisory firm did not tell investors about changes to retirement funds that resulted in higher capital gains taxes for hundreds of thousands of people.
Over 15,000 New Yorkers, including 2,700 Long Islanders, were impacted by the higher capital gains tax bills, according to James.
“Vanguard is committed to supporting the more than 50 million everyday investors and retirement savers who entrust us with their savings,” Vanguard spokesperson Netanel Spero said in a statement Friday. “We’re pleased to have reached this settlement and look forward to continuing to serve our investors with world-class investment options.”
As part of the nationwide settlement, Vanguard was ordered to pay $13.5 million in penalties, though that money will be added to the SEC-managed pool of restitution funds of $92.91 million, for a total of $106 million, according to court documents.
The SEC will contact investors who are eligible for restitution.
“People pay Vanguard to help manage and safeguard their retirement funds, but instead these investors were left in the dark about changes that forced them to pay thousands of extra dollars,” James said in a statement Friday.
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