US Securities Exchange Commission targets former Gross bond fund

PIMCO, the former firm of Bill Gross, said it had received a “Wells notice” from the SEC relating to the Total Return Active Exchange Traded Fund. A Wells Notice is a letter that the SEC sends when it is planning to bring an enforcement action while giving the recipient a chance to rebut the allegations. The notice is focussing on how PIMCO valued mortgage backed securities in a four month period in 2012 and whether the valuations led to inflation of the fund’s performance. Bill Gross left PIMCO to join Janus Capital Partners in September 2014 but he was in charge of the ETF at the time the allegation refers to. PIMCO have not publicly responded to the allegations so far.