Pgim Investments Llc

Allegations: ON SEPTEMBER 16, 2019, PGIM INVESTMENTS LLC AND AN AFFILIATE (TOGETHER "PGIM INVESTMENTS") ENTERED INTO AN AGREEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") TO SETTLE CHARGES RELATING TO CERTAIN SECURITIES LENDING AND FOREIGN TAX RECLAIM PRACTICES THAT PGIM INVESTMENTS PREVIOUSLY SELF-REPORTED (THE "ORDER"). THE SEC ALLEGED THAT FROM APPROXIMATELY JULY 2005 TO NOVEMBER 2015, PGIM INVESTMENTS RECALLED SECURITIES ON LOAN FROM FUNDS IN ADVANCE OF THE SECURITIES' DIVIDEND RECORD DATE TO INCREASE FEDERAL TAX BENEFITS FOR PRUDENTIAL FINANCIAL, INC. ("PRUDENTIAL") PGIM INVESTMENTS' ULTIMATE PARENT. THE ORDER FOUND THAT IN SOME CASES, THIS RECALL PRACTICE FAILED TO MAXIMIZE SECURITIES LENDING INCOME FOR CERTAIN SEPARATE ACCOUNT INVESTMENTS AND FUNDS. THE SEC ALSO FOUND THAT IN 2006, CERTAIN FUNDS MANAGED BY PGIM INVESTMENTS WERE REORGANIZED FROM REGISTERED INVESTMENT COMPANIES TO PARTNERSHIPS WHICH HAD THE EFFECT OF PROVIDING CERTAIN FEDERAL INCOME TAX BENEFITS TO PRUDENTIAL (THE "REORGANIZATION"). THE ORDER FURTHER FOUND THAT AS A RESULT OF THE REORGANIZATION, THE FUNDS WERE SUBJECT TO HIGHER TAXES IN CERTAIN FOREIGN JURISDICTIONS AS WELL AS DELAYS IN RECEIVING FUNDS WHEN TAXES WERE REFUNDABLE. THE SEC FOUND, AND PGIM INVESTMENTS NEITHER ADMITTED OR DENIED, THAT PGIM INVESTMENTS VIOLATED SECTION 206(2) OF THE ADVISERS ACT OF 1940 ("ADVISERS ACT"), SECTION 206(4) OF THE ADVISERS ACT AND RULES 206(4)-8 AND 206(4)-7 THEREUNDER. Status: Final Sanction Detail: PURSUANT TO THE SETTLEMENT, THE SEC ORDERED DISGORGEMENT OF $27.6 MILLION, AND A CIVIL MONETARY PENALTY OF $5 MILLION. THE DISGORGEMENT AND PENALTY WERE PAID WITHIN 14 DAYS OF THE ENTRY OF THE ORDER. NO PORTION OF THE PENALTY WAS WAIVED. Summary: ON SEPTEMBER 16, 2019, PGIM INVESTMENTS LLC AND AN AFFILIATE (TOGETHER "PGIM INVESTMENTS") ENTERED INTO AN AGREEMENT WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ("SEC") TO SETTLE CHARGES RELATING TO CERTAIN SECURITIES LENDING AND FOREIGN TAX RECLAIM PRACTICES THAT PGIM INVESTMENTS PREVIOUSLY SELF-REPORTED. THE SEC ADMINISTRATIVE ORDER IS FINAL. PURSUANT TO THE SETTLEMENT, THE SEC ORDERED DISGORGEMENT OF $27.6 MILLION, AND A CIVIL MONETARY PENALTY OF $5 MILLION. THE DISGORGEMENT AND PENALTY WERE PAID WITHIN 14 DAYS OF THE ENTRY OF THE ORDER.