Vanguard Settles SEC Charges for $106.4 Million

Vanguard Group has agreed to pay $106.4 million to settle charges from the U.S. Securities and Exchange Commission (SEC) regarding misleading statements about capital gains distributions and tax implications for retail investors in their target retirement funds. This settlement addresses issues related to Vanguard's decision in December 2020 to lower the minimum investment for its Institutional Target Retirement Funds, leading to increased redemptions and significant capital gains taxes for remaining investors in taxable accounts. The SEC emphasized the importance of providing materially accurate information to investors to prevent unexpected tax liabilities. Vanguard neither admitted nor denied the charges but has resolved the SEC's probe alongside parallel investigations by New York, New Jersey, and Connecticut authorities. The settlement will be distributed to affected investors, reaffirming Vanguard's commitment to transparency. This case underscores the SEC's role in enforcing federal securities laws to protect investors.