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SEC Fines Davis Funds for Lax Disclosure of IPO Trades

Davis Opportunity didn't tell investors enough about IPO trades, SEC says.

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The Securities and Exchange Commission has fined Davis Selected Advisors, a firm better known for its buy-and-hold investing philosophy, $10,000 for not telling investors how much trading initial public offerings boosted the returns of one of its funds in 1999 and 2000.

Davis Selected Advisors failed to adequately disclose in its prospectuses or annual reports how a small amount of trading in technology and telecommunications IPOs at the height of the mania for such issues made a big difference in Davis Growth Opportunity's (RPEAX) 1999 and 2000 returns, according to an SEC administrative order.

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Dan Culloton does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.