Amvescap (NYSE:AVZ)
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AMVESCAP PLC Announces Agreements With SEC, New York, Colorado,
Georgia
Settlement Resolves Market Timing Issues for INVESCO and AIM Broad Range of New
Controls Implemented to Protect Clients
LONDON, Sept. 7 /PRNewswire-FirstCall/ -- AMVESCAP PLC today announced its
subsidiary INVESCO Funds Group Inc. (IFG) has reached agreements in principle
with the Attorneys General of Colorado and New York and the staff of the U.S.
Securities and Exchange Commission (SEC) to resolve civil enforcement actions
and investigations related to market timing. Its AIM Advisors, Inc. subsidiary
(AIM) has reached agreements in principle with the Attorney General of New York
and with the staff of the SEC to resolve market-timing investigations. All of
the agreements are subject to preparation and signing of final settlement
documents. The SEC agreements also are subject to approval by the full
Commission. Additionally, the Secretary of State of Georgia is agreeable to the
resolutions with other regulators.
Under terms of the agreements, IFG will pay a total of $325 million, of which
$110 million is civil penalties. AIM will pay a total of $50 million, of which
$30 million is civil penalties. The agreements also will commit the companies
to a range of corporate governance reforms. Under the agreements with New York
and Colorado, management fees on the AIM/INVESCO funds will be reduced by $15
million per year for the next five years. IFG will make other
settlement-related payments required by the State of Colorado.
"We deeply regret the harm done to fund investors and have taken strong
measures to prevent any recurrence," said Charles W. Brady, Executive Chairman
of AMVESCAP. "Our firm was founded on principles of integrity and care for our
clients. Our fundamental commitment has been -- and must continue to be -- to
uphold our clients' trust by putting their interests first. It has been
painful for AMVESCAP employees at all levels to learn that these core values
were not always upheld, impacting our customers and damaging the reputation of
our company. With these agreements, we rededicate our firm to maintaining the
highest ethical standards as we focus on delivering strong investment
performance to our clients around the world."
In addition to the corporate governance changes to be adopted as part of
today's regulatory agreement, AMVESCAP has initiated changes across operations
to help ensure we put clients' interests first in all activities. This year,
AMVESCAP initiated a program to significantly increase its legal, compliance,
and internal audit capabilities. AMVESCAP also created a company-wide
compliance reporting line that provides employees and others with a
confidential way to voice concerns about potentially improper activity. In
addition, AIM Advisors implemented a number of measures to strengthen controls
and ensure compliance with policies designed to protect the interest of fund
shareholders. They include:
* Strengthened daily monitoring of trading activities
* The imposition of a 2% redemption fee on additional funds believed to
be most vulnerable to harmful short-term trading
* The implementation of an enhanced exchange policy designed to limit
exchanges between funds
* An enhanced fair value pricing policy
Mr. Brady said: "Our goal is not just to meet prevailing standards of
governance and compliance but to exceed them. To that end, we continue to
reach out to clients, shareholders, employees, and our regulators around the
world in a dialogue designed to make sure we are taking all necessary steps to
earn their confidence and trust in our firm. Based on those conversations, we
will continue to take steps to strengthen the company in the months ahead."
An independent consultant will be retained to oversee the distribution of the
restoration fund amounts to mutual fund shareholders. As previously noted in
January, AMVESCAP intends to pursue legal action against third parties who
facilitated late trading or any other illegal activity.
AMVESCAP is a leading independent global investment manager, dedicated to
helping people worldwide build their financial security. Operating under the
AIM, INVESCO, and Atlantic Trust brands, AMVESCAP strives to deliver
outstanding investment performance and service through a comprehensive array of
retail and institutional products for clients around the world. The Company is
listed on the London, New York, Paris, and Toronto stock exchanges with the
symbol "AVZ."
This release may include statements that constitute "forward-looking
statements" under the United States securities laws. Forward-looking statements
include information concerning possible or assumed future results of our
operations, earnings, liquidity, cash flow and capital expenditures, industry
or market conditions, assets under management, acquisition activities and the
effect of completed acquisitions, debt levels and the ability to obtain
additional financing or make payments on our debt, regulatory developments,
demand for and pricing of our products and other aspects of our business or
general economic conditions. In addition, when used in this report, words such
as "believes," "expects," "anticipates," "intends," "plans," "estimates,"
"projects," and future or conditional verbs such as "will," "may," "could,"
"should," and "would," or any other statement that necessarily depends on
future events, are intended to identify forward-looking statements.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. Although we make such statements based on
assumptions that we believe to be reasonable, there can be no assurance that
actual results will not differ materially from our expectations. We caution
investors not to rely unduly on any forward-looking statements. In connection
with any forward-looking statements, you should carefully consider the areas of
risk described in our most recent Annual Report on Form 20-F, as filed with the
United States Securities and Exchange Commission (SEC). You may obtain these
reports from the SEC's website at http://www.sec.gov/ .
DATASOURCE: AMVESCAP PLC
CONTACT: Doug Kidd of AMVESCAP PLC, +1-404-479-2922 (U.S.); or Angus
Maitland of Maitland Consultancy, +44-207-379-5151 (U.K.)
Web site: http://www.sec.gov/