The Vanguard Group, Inc. has agreed to pay $106.41 million to settle charges from the Securities and Exchange Commission (SEC) over misleading statements related to capital gains distributions and tax consequences for retail investors.

Vanguard to pay $106.41M penalty for misleading investors on capital gains distributions and tax consequences in target date retirement funds.

Vanguard group will pay $106.4 million to settle charges brought by the Securities and Exchange Commission and state officials from New York, Connecticut and New Jersey over alleged misleading statements in fund prospectuses that led retirement plan investors to incur high capital gains taxes.

Regulators penalized Vanguard over allegedly misleading statements after the company made changes to target-date funds that stuck some investors with big tax bills.

The settlement stems from a three-year multi-state task force investigation coordinated through the North American Securities Administrators Association’s Enforcement Section Committee.

Vanguard Group will pay $106.4 million to settle U.S. Securities and Exchange Commission charges alleging it failed to disclose important tax information about its popular target-date funds, resulting in hundreds of thousands of ordinary investors getting stuck with inflated tax bills.

More than 15,000 New York investors, including 2,700 Long Islanders, were forced to pay higher capital gains taxes after Vanguard made changes to retirement funds.

The alleged violations stem from a 2020 change where Vanguard lowered the minimum investment requirement for its institutional target date funds. The SEC order found that the chan