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Tax Free Fund for Utah former managers get SEC cease-and-desist orders
By Marisa Wong
Madison, Wis., Jan. 7 - The Securities and Exchange Commission said that it issued cease-and-desist orders to Kimball L. Young and Thomas S. Albright, former portfolio managers of the Tax Free Fund for Utah, on Friday.
The orders find that Young and Albright defrauded the municipal bond fund by improperly charging municipal bond issuers $520,626 in undisclosed "credit monitoring fees" between 2003 and April 2009 and pocketing the fees for themselves.
Specifically, the orders say that the former portfolio managers willfully violated Section 17(e)(1) of the Investment Company Act of 1940 and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.
Young and Albright each consented to the issuance of an order, without admitting or denying any of its findings.
In addition, Young and Albright must each pay $294,789 in disgorgement and prejudgment interest and a $75,000 civil penalty. They have also been barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent or nationally recognized rating agency.
The two individuals are prohibited from acting as an employee, officer, director, member of an advisory board, investment adviser, depositor of or principal underwriter for a registered investment company.
Young may reapply for association after five years, and Albright may reapply after one year.
Tax Free Fund for Utah is a municipal bond fund operated and advised by investment adviser Aquila Investment Management, LLC. The fund invests primarily in tax-free municipal bonds of Utah issuers, such as schools, highways, hospitals and water and sewer facilities.
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