Defendant Name: Transamerica Financial Advisors, Inc.

Defendant Type: Subsidiary of Public Company

Document Reference: 2018-167

Document Details

Legal Case Name In the Matter of AEGON USA Investment Management, LLC, Transamerica Asset Management, Inc., Transamerica Capital, Inc., and Transamerica Financial Advisors, Inc.
Document Name Transamerica Entities to Pay $97 Million to Investors Relating to Errors in Quantitative Investment Models
Document Date 27-Aug-2018
Document Format Administrative Proceeding
File Number 3-18681
Allegation Type Investment Advisers/Investment Companies
Document Summary The Commission stated that: "According to the SEC's order, investors put billions of dollars into mutual funds and strategies using the faulty models developed by investment adviser AEGON USA Investment Management LLC (AUIM). AUIM, its affiliated investment advisers Transamerica Asset Management Inc. (TAM) and Transamerica Financial Advisors Inc., and its affiliated broker-dealer Transamerica Capital Inc., claimed that investment decisions would be based on AUIM's quantitative models. The SEC's order finds that the models, which were developed solely by an inexperienced, junior AUIM analyst, contained numerous errors, and did not work as promised. The SEC found that when AUIM and TAM learned about the errors, they stopped using the models without telling investors or disclosing the errors."

Disgorgement & Penalty Information

Resolutions
Fair Funds
Monetary Penalties:

Disgorgement

Individual:     Shared:     $53,300,000.00
Shared with: AEGON USA Investment Management, LLC, Transamerica Asset Management, Inc., Transamerica Capital, Inc.

Civil Penalty

Individual:     Shared:     $36,300,000.00
Shared with: AEGON USA Investment Management, LLC, Transamerica Asset Management, Inc., Transamerica Capital, Inc.

Pre-Judgment Interest

Individual:     Shared:     $8,000,000.00
Shared with: AEGON USA Investment Management, LLC, Transamerica Asset Management, Inc., Transamerica Capital, Inc.

Total Penalty

Individual:     Shared:     $97,600,000.00
Shared with: AEGON USA Investment Management, LLC, Transamerica Asset Management, Inc., Transamerica Capital, Inc.

Related Documents:

33-10539 27-Aug-2018 Administrative Proceeding
Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933, Section 15(b) of the Securities Exchange Act of 1934, Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, and Section 9(f) of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order
According to the Commission: "Respondents violated the federal securities laws and rules thereunder while offering, selling, and managing 15 quantitative-model-based mutual funds, variable life insurance investment portfolios, and variable annuity investment portfolios (each of which was a registered investment company and collectively are the "Products") and separately managed account ("SMA") strategies (the "Strategies") (collectively, the "Products and Strategies")."

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