FINRA Disciplinary Actions! Vanguard Marketing Corporation (a wholly-owned subsidiary of The Vanguard Group) overstated projected yield & projected annual income for nine money market funds on approximately 8.5 million VMC account statements
from at least October 2019 - June 2021. $800k fine/censure
Source: https://www.finra.org/sites/default/files/fda_documents/2020068469601%20Vanguard%20Marketing%20Corporation%20CRD%207452%20AWC%20gg.pdf
The personal performance section of the account statement incorrectly identified the deposit as an increase in market value instead of a cash deposit:
VMC’s account statements inaccurately reflected margin credits and debits— such as paying down margin debt or purchasing a security on margin—as market appreciation or depreciation where the customer maintained an open position spanning multiple months.
OOOHHHH, corporate actions being mishandled?!? I can't wait for the complaint down the line on how they handled GameStop's corporate action!
hmmm...
Penalty?
TLDRS:
Vanguard Marketing Corporation (a wholly-owned subsidiary of The Vanguard Group) overstated projected yield & projected annual income for nine money market funds on approximately 8.5 million VMC account statements from at least October 2019 - June 2021.
- Penalty: $800k fine and censure
So if the errors didn't affect yield paid to customers, why were these numbers being calculated like this at all?
- Why did they need to go through and change their process so deposits showed the actual value of the deposit and not an increase in market value?!?
- What other down stream process on VMC's side (and by extension The Vanguard Group) relied on this number for any sort of downstream calculation of market value?
- It's just a glitch, right?
