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Pimco-run bond fund investigated by US authorities Pimco-run fund investigated by US authorities
(about 1 hour later)
The world's largest bond fund, run by investment firm Pimco, is being investigated over allegations that managers inflated returns. A fund run by investment firm Pimco is being investigated over allegations that managers inflated returns.
The $222bn (£135bn) exchange-traded fund is run by celebrated financier and Pimco co-founder Bill Gross, who has been interviewed by US authorities, according to the Wall Street Journal. The exchange-traded fund (ETF) is run by celebrated financier and Pimco co-founder Bill Gross, who has been interviewed by US authorities, according to the Wall Street Journal.
The Pimco Total Return ETF has grown rapidly in the past couple of years.
Pimco said the investigation was a "private matter" and that its pricing procedures were "entirely appropriate".Pimco said the investigation was a "private matter" and that its pricing procedures were "entirely appropriate".
The fund declined by 1.9% last year.
Known as Total Return, the fund is Pimco's flagship product, and Mr Gross' personal project.
The Californian firm confirmed it had been co-operating with the US regulator, the Securities and Exchange Commission (SEC), but did not elaborate on the nature of the investigation.The Californian firm confirmed it had been co-operating with the US regulator, the Securities and Exchange Commission (SEC), but did not elaborate on the nature of the investigation.
The Wall Street Journal reported on Tuesday that the investigation had been going on for months and concerned the manner in which Pimco purchased and valued certain bonds.The Wall Street Journal reported on Tuesday that the investigation had been going on for months and concerned the manner in which Pimco purchased and valued certain bonds.
The company, widely considered to be the world's biggest bond manager, was set up in 1971, and acquired by insurance giant Allianz in 2000.The company, widely considered to be the world's biggest bond manager, was set up in 1971, and acquired by insurance giant Allianz in 2000.
The fund concerned has been plagued by poor performance, with investors pulling almost $70bn (£42bn) out of it since May 2013, according to Reuters. Shares in Allianz have fallen slightly following news of the SEC investigation.
In January, Pimco's chief executive, Mohammed el-Erian, announced his resignation for undisclosed reasons.
Shares in Allianz have fallen slightly following news of the SEC investigation