Where are you now John Bogle?
This news reaches us as we commemorate the 5-year anniversary, (almost to the day), of the mutual fund market timing scandals.
The Vanguard Group has enjoyed an excellent reputation for providing an even playing field for investors through low fees, passive investment styles and attention to conflicts of interest. Now the man who took over from John Bogle, Chief Investment Officer George Sauter, has been accused of investing in illegal gambling rackets.
Vanguard Managers Invested in Web Gambling, Suit Says
Aug. 29 (Bloomberg) — Executives of Vanguard Group Inc., the second-biggest U.S. manager of stock and bond mutual funds, illegally invested client assets in companies running Internet gambling businesses banned in the U.S., according to a lawsuit.
Chief Investment Officer George Sauter, portfolio manager Duane Kelly and eight trustees violated U.S. racketeering laws and breached their fiduciary duties to investors by acquiring stock in the Web-based businesses, investors in two Vanguard- managed funds said in a complaint filed today in U.S. District Court in New York.
“Defendants caused the funds to become owners of illegal gambling businesses,” according to the complaint. The plaintiffs seek class-action, or group, status on behalf of all similarly situated investors, plus unspecified compensatory and punitive damages.
“We don’t have detailed information at the moment about what they actually paid and what they actually sold these investments for,” Sheridan said. He said the defendants could be liable for tens of millions of dollars in damages.
Filed under: Funds and crime, John Bogle | Tagged: crime, gus sauter, John Bogle, mfsw, mutual funds
