Vanguard to Pay More Than $100 Million to Resolve Violations Related to Target Date Retirement Funds

The Securities and Exchange Commission today announced that The Vanguard Group, Inc. will pay $106.41 million to settle charges for misleading statements related to capital gains distributions and tax consequences for retail investors who held Vanguard Investor Target Retirement Funds (Investor TRFs) in taxable accounts. The settlement amount will be distributed to harmed investors. The SEC’s order finds that, on December 11, 2020, Vanguard announced that the minimum initial investment amount of Vanguard Institutional Target Retirement Funds (Institutional TRFs) was lowered from $100 million to $5 million. In the following months, a substantial number of retirement plan investors redeemed their Investor TRFs and switched to the Institutional TRFs because the latter funds had lower expenses.