The SEC today filed a civil suit in U.S. District Court in Wisconsin against Heartland Advisors, CEO William Nasgovitz and several of its executives for violating securities law through misrepresentation, mispricing and insider trading in the Heartland Advisors' High-Yield Municipal Bond and Short-Duration High-Yield Municipal Bond mutual funds. The value of the funds, and a smaller related fund, dropped by about $93 million between Sept. 28 and Oct. 13, 2000, when the company sought to correct the months of deliberate mispricing, the SEC lawsuit alleges.
The SEC also accused Heartland's directors of failing to correct the mispricing when it first came to their attention. The SEC also charged FT Interactive Data, an independent data service, with aiding and abetting and causing certain pricing violations.
Officials from Heartland and FT Interactive did not return calls seeking comment by press time.
