Pacific Investment Management Co. said regulators are considering taking action against the firm over marking of securities in the exchange-traded fund version of its flagship Total Return Fund.
Pimco received a Wells notice from the U.S. Securities and Exchange Commission indicating the regulator's staff is recommending civil action against the firm related to an investigation into the ETF, the Newport Beach, California-based firm said Monday in a statement.
The notice relates to the fund's valuation of smaller positions in mortgage-backed securities not guaranteed by the government between its inception on Feb. 29, 2012, and June 30 of that year, as well as performance disclosures and related compliance policies and procedures, according to the statement.