Reuters: Regulatory News: UPDATE 1-Amish fund in deferred prosecution deal with SEC over disclosure

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UPDATE 1-Amish fund in deferred prosecution deal with SEC over disclosure Jul 18th 2012, 18:34 Wed Jul 18, 2012 2:34pm EDT By Sarah N. Lynch WASHINGTON, July 18 (Reuters) - An Amish fund struck a deferred prosecution deal with U.S. securities regulators on Wednesday over an offering memo that had allegedly not been updated for 15 years. The Securities and Exchange Commission said the non-profit fund, which sold securities to help fund mortgage and construction loans for Amish families in Ohio, immediately corrected problems with its disclosures to investors, thus earning lenient treatment. The Amish Helping Fund, formed in 1995, funds its loans through investment contracts. Although the SEC said the Amish fund broke federal securities laws with its stale disclosure, there was no evidence that any investors suffered undue harm. It has about 3,500 investors, more than 1,200 borrowers and about $125 million in mortgage receivables. "Cooperation provides real and substantial benefits for companies that respond appropriately to the discovery of wrongdoing in their ranks," said Robert Khuzami, director of the SEC's enforcement division. "Here, the SEC acknowledged and rewarded AHF's cooperation because, among other things, it acted swiftly and completely in correcting the misleading statements provided to investors." John J. Carney, an attorney for Baker Hostetler representing the Amish Helping Fund, said in a statement that the SEC's investigation had started in June 2010. "The fund appreciates the SEC's exercising its discretion to resolve this matter by deferred prosecution agreement rather than bringing a formal enforcement action," said Carney. Andrew Yoder, the chairman of the fund's board of directors, added that it has implemented remedial measures including an independent audit of its financial statements and new compliance procedures. Since January 2010, the SEC has been trying to entice companies and individuals to cooperate in its investigations through the use of incentives such as deferred and non-prosecution agreements. The SEC's first-ever deferred prosecution agreement occurred in May 2011 with steel pipe maker Tenaris, which settled allegations it had bribed Uzbekistan government officials to win business. Link this Share this Digg this Email Reprints

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