The
The SEC said that AmSouth entered into improper side agreements with the funds administrator,
In addition, the SEC found that BISYS paid AmSouth $1.161 million as a consulting fee for its advice on how to market its own funds, without disclosing either of these agreements to the funds independent trustees or shareholders.
AmSouth is now part of
This is the Commissions first case against a mutual fund advisor that secretly used a portion of the administrative fees paid by the funds shareholders to pay for marketing expenses that should have been paid out of the advisors own pocket, said Linda Chatman Thomsen, director of the SECs division of enforcement. The Commission demands transparency in mutual fund disclosures and will not tolerate advisors that seek to hide their own marketing expenses in other types of fees charged to fund shareholders.
Without admitting or denying the charges, AmSouth Asset Management agreed to pay $11.4 million, consisting of $7.7 million in disgorgement, prejudgment interest of $2.2 million and a $1.5 million penalty.