INVESCO LTD

In October 2004, Invesco Funds Group and AIM Advisors agreed to a $450 million settlement with the SEC and the New York Attorney General to resolve charges that they permitted illegal market timing of their mutual funds. Invesco paid $215 million in damages and a $110 million penalty; AIM paid $20 million in damages and a $30 million penalty. The companies also agreed to $75 million in fee reductions over five years (SEC Press Release 2004-143).

From at least July 2001 through October 2003, Invesco fraudulently accepted investments by market timers to enhance management fees. The practice involved arrangements known as "special situations" with mutual fund timers, resulting in billions of dollars of rapid-fire transactions that diluted returns for typical long-term investors. AIM separately entered into negotiated arrangements with at least 10 market timers, including hedge funds, allowing them to trade in violation of prospectus terms. The case was part of the broader 2003 mutual fund scandal that exposed systemic market timing and late trading abuses across the industry. AG Spitzer described the conduct as "a pattern of allowing favored investors to trade in ways that harmed ordinary investors."