In the Matter of Reserve Management Company, Inc.

Administrative Complaint against Reserve Management by the Mass. Secretary of State


The Enforcement Section of the Massachusetts Securities Division of the Office of the Secretary of the Commonwealth filed this enforcement action against parties affiliated with the Reserve Primary Fund in connection the Fund “breaking the buck”.

The complaint alleges that during the week of Lehman Brothers’ bankruptcy, sales personnel of the Fund made false and misleading statements in an attempt to reassure investors and assuage the onslaught of redemption requests. Simultaneously, the Fund satisfied redemption requests for larger, more favored customers.

The Commonwealth is seeking restitution for affected Massachusetts investors for violation of state securities laws, as well as fines and censures.

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Reference Info:State, 1st Circuit, Massachusetts | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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