Wells Fargo, parent of the Evergreen mutual funds, has agreed to pay $40 million to the Securities and Exchange Commission to settle charges it inflated the value of mortgage-backed securities held by one of its mutual funds, the Ultra Short Opportunities Fund.

The fine includes $33 million to compensate investors, civil fines of $4 million and $3 million in restitution.

An spokeswoman for Evergreen, which neither admitted to or denied the charges, said the company was happy to resolve the matter and move forward.

The SEC said that even after the company correctly valued the securities, which were inflated 17%, it only informed select shareholders about the reasons for the change, permitting them to cash out of the fund to avoid losses ahead of other shareholders.

“By picking and choosing to disclose negative information to some investors and not others, Evergreen gave certain shareholders an unfair advantage and left others in the dark,” said David Bergers, director of the SEC’s Boston office. “Evergreen harmed investors and prevented them from making informed decisions by overstating the value of its holdings in mortgage-backed securities.”

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