Fiduciary Asset Management and Claymore Advisors will pay up to $47 million to settle SEC charges that the firms failed to inform investors about the derivative strategies of a closed-end mutual fund in 2008, contributing to its collapse and liquidation.
The Fiduciary/Claymore Dynamic Equity Fund, for which FAMCO was the subadviser, lost $45 million in September and October 2008, and a total of $70 million, or 72.4% of its net value, before the fund was liquidated in 2009, according to an SEC statement.
According to the statement, Claymore will compensate investors up to $45 million for losses related to what the SEC called the problematic trading, while FAMCO will pay $2 million related to “disgorgement and penalties.”
Claymore Group, of which Claymore Advisors was a subsidiary, was purchased by Guggenheim Partners in the third quarter of 2009. Guggenheim spokeswoman Jeaneen Pisarra did not return a phone call for comment by press time.
A statement from FAMCO says the firm “is pleased to have resolved this matter. It dates back to 2008 and does not pertain to any current Fiduciary Asset Management products, investment strategies or employees. We took the matter seriously and Fiduciary Asset Management fully cooperated with the SEC during the process.”