In the Matter of Claymore Advisors, LLC, Admin. Proc. File No. 3-15139; In the Matter of Mohamed Riad and Kevin Timothy Swanson, Admin. Proc. File No. 3-15141; In the Matter of Fiduciary Asset Management, LLC, Admin. Proc. File No. 3-15140. On December 19, 2012, the SEC announced charges against Claymore Advisors, Fiduciary Asset Management, Mohammed Riad and Kevin Swanson. The SEC’s Orders Instituting Proceedings Found that a Fiduciary/Claymore mutual fund had strategies to enhance returns. One was to write out-of-the money put options and the other was to short variance swaps. As a result, the fund was exposed to risks that were not disclosed to investors and which caused the fund to lose more than $45 million over a two-month period, which was about 45% of the fund’s assets. Claymore and Fiduciary agreed to settle the charges. Claymore has developed a plan to distribute up to $45 million to compensate investors. Fiduciary will pay $2 million in disgorgement and civil monetary penalties. The SEC’s case against Riad and Swanson is not settled. The OIP alleges that they violated, aided and abetted, and/or caused violations of Section 10(b) of the Exchange Act and Rule 10b-5, Section 206(4) of the Investment Advisers Act and Rule 206(4)-8, and Section 34(b) of the Investment Company Act. The Division of Enforcement also alleges that Riad caused violations of Investment Company Act Rule 8b-16.
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