AG Brown’s Securities Division has concluded the $106 million settlement with Vanguard Marketing Corporation and The Vanguard Group, Inc. (Vanguard) for failing to supervise certain registered persons and failing to disclose potential tax consequences to investors following a change in investment minimums for certain Vanguard target date retirement funds. The settlement, announced earlier this year, is the result of a joint investigation by a taskforce of state regulators and the U.S. Securities and Exchange Commission (SEC). 

Under the final terms of the settlement, investors will be compensated for capital gains taxes imposed based on Vanguard’s actions. Affected investors can expect to be notified by the SEC as it administers the remediation payments through its Fair Fund program. Those investors will be compensated for the capital gains taxes related to the investment with the remediation amounts determined based on the investors’ individual tax situations.   

 “Marylanders who invested their retirement savings deserve to know when a company’s decisions will cost them thousands in unexpected taxes. This settlement holds Vanguard accountable and ensures affected investors are compensated for the tax bills they should never have received in the first place.” - AG Brown