On June 13, 2013, without admitting or denying the allegations, eight former directors of five mutual funds agreed to settle SEC charges that they failed to satisfy their fair valuation responsibilities under federal securities laws. The SEC did not require the directors to pay a fine or monetary penalties, but required them to “cease and desist” from future violations.

The funds at issue were heavily invested in securities backed by subprime mortgages. As a result of the alleged violations, the SEC said that the funds overstated the value of their securities as the housing market was on the brink of a financial crisis in 2007. The funds’ investment adviser and others previously agreed to pay $200 million to settle charges on related conduct.