Heartland Advisors Inc. Settles SEC Charges for $3.9 Million

Heartland Advisors Inc. and several of the investment adviser’s employees have agreed to pay $3.9 Million to settle Securities and Exchange Commission charges that they allegedly violated the Federal Securities Act.

The SEC case stems from incidents that allegedly took place from March through October 2000, when Heartland “negligently mispriced certain bonds owned by two high-yield municipal bond funds.” Because the funds were mispriced during that time period, net asset values for the funds were incorrect and so were the prices for funds’ shares.

Redeeming investors therefore benefited at the expense of new and remaining investors when investors bought and redeemed fund shares at these incorrect prices.

Heartland devalued the bonds in October 2000. Shareholders lost some $60 million. The SEC has ordered cease-and-desist proceedings. The order also imposed cease-and-desist actions and remedial sanctions.

Heartland Advisors President William Nasgovitz, Senior VP Kevin Clark, COO Paul Beste, and former employees Greg Winston, Thomas Conlin, Hugh Denison, and Kenneth Della are also named as respondents in the SEC case.

As part of the settlement agreement, all respondents agreed to cease and decease from violating certain federal securities laws. None of them are admitting to or denying the allegations.

Investors who lose money because of the misconduct of broker-dealers or investment advisers are entitled to civil remedies to recover their losses. Please contact the stockbroker fraud law firm of Shepherd Smith and Edwards today to schedule your free consultation. We have helped thousands of investors get their money back.

Related Web Resources:

Heartland to pay $3.9M fine in securities case, Bizjournals.com, January 29, 2008
Read the SEC Order (PDF)

Heartland Advisors

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