(Bloomberg) — Vanguard Group will pay more than $106 million to settle allegations by the U.S. Securities and Exchange Commission that it made misleading statements about capital gain distributions and tax consequences to retail investors who held funds of popular retirement with a target date in taxable accounts.

Read more from Bloomberg

The company announced in December 2020 that it would lower the minimum initial investment for its Vanguard Institutional Target retirement funds. The SEC says that to meet the demand, a different Vanguard retirement fund had to sell underlying assets at a profit because financial markets had recovered from their pandemic lows.

As a result, retail investors in Vanguard Investor Target retirement funds who continued to hold their shares in taxable accounts faced historically larger capital gains distributions and tax liabilities, according to the agency.

“Materially accurate information about capital gains and tax implications is critical for investors saving for their retirements,” said Corey Schuster, head of the asset management unit of the Enforcement Division of the SEC, in a statement. “Companies must ensure that they accurately describe to investors the potential risks and consequences associated with their investments.”

The settlement will be distributed to affected investors through a fair fund, the SEC said.

“Vanguard is committed to supporting the more than 50 million everyday investors and retirement savers who entrust their savings to us. We are delighted to have reached this agreement and look forward to continuing to serve our investors with world-class investment options,” the firm said in a statement.

(Updates with details throughout.)

Read more from Bloomberg Businessweek

©2025 Bloomberg LP