Phoenix, Ariz. - The Arizona Corporation Commission entered into a $132.91 million settlement agreement with Vanguard Marketing Corporation and The Vanguard Group, Inc (Vanguard) for failing to supervise certain registered persons and failing to disclose potential tax consequences to investors following a change in investment minimums for certain target date retirement funds.
The 2025 settlement stems from a three-year, multi-state task force investigation coordinated through the North American Securities Administrators Association (NASAA), and a concurrent investigation by the U.S. Securities and Exchange Commission (SEC).
Within the Vanguard Group alone, 3,675 Arizona account holders were financially impacted, and there are more Arizona investors who were also impacted through investments with non-Vanguard custodians. The joint settlement ensures restitution for all investors in the case that were subject to significant, unanticipated capital gains taxes resulting from Vanguard’s failure to disclose potential capital gains and tax consequences.
The SEC has set up a Fair Fund and will manage the settlement distribution, while Arizona and other NASAA members will ensure that restitution is paid. The Fair Fund administrator will identify the affected investors, including those in Arizona that held these Vanguard funds at non-Vanguard custodians.
Affected investors should contact the Fair Fund administrator to ensure they are included in the settlement. The SEC has a designated website informing investors on the Fair Fund process:
https://www.sec.gov/enforcement-litigation/distributions-for-harmed-investors/vanguard.
Vanguard neither admits nor denies the findings of fact contained herein. To date, Vanguard has paid $132.91 million into the SEC Fair Fund. The SEC will manage the distribution plan for all states including Arizona.
For further concerns or questions regarding this matter, contact the Duty Officer of the Arizona Corporation Commission’s Securities Division at 602-542-0662, or email SecuritiesDiv@azcc.gov.
