Value Line - Value Line Settled With SEC

Value Line Settled With SEC

On September 11, 2009, Value Line settled with the SEC. The settlement offer, in which Value Line neither admits nor denies the investigation’s findings, relates to commissions paid by nine Value Line equity mutual funds to an affiliated brokerage subsidiary from 1986 through November 2004. The settlement offer seeks to avoid costly and protracted litigation. Terms of the settlement offer call for Value Line to pay approximately $43.7 million of the reserve into a Fair Fund to reimburse shareholders who owned shares in the affected mutual funds in the period covered by the settlement. The $43.7 million sum includes a fine of $10,000,000 against Value line, $1,000,000 against the CEO, Jean Buttner and $250,000 against the Vice President, David Henigson. In addition, under the settlement offer, the CEO and former CCO would be barred from serving as an officer or director of a public company and from association with an investment adviser, broker-dealer or registered investment company subject, in the case of the CEO, to a limited exception from the associational bar for a period of one year from the entry of the settlement Order to enable steps to be taken that will terminate her association with the Value Line mutual funds, asset management and distribution businesses. Howard A. Brecher, Chief Legal Officer of the Company, would become the Acting Chairman and Acting Chief Executive Officer after entry of a settlement order. Value Line, which previously reported the investigation in public filings dating from back to 2005, was forced to restructure its investment management subsidiary and brokerage relationships and is confident that they conform to applicable regulatory requirements. Value Line management ended the mutual funds’ use of the affiliated brokerage in 2004.