SEC Drops Proceedings Against Morningstar

February 8, 2006 (PLANSPONSOR.com) - Morningstar Inc. has announced that the Securities and Exchange Commission (SEC) has decided not to proceed against Morningstar after its investigation related to the Rock Canyon Top Flight Fund.

The investigation began on May 24, 2004 and related to incorrect data Morningstar published earlier that year for the Rock Canyon Top Flight stock fund.   The error was cause by some confusing communications about the impact of a 2003 capital-gains distribution on the fund’s share price, and made the fund’s performance appear better than it was.  

Beginning February 27, 2004, Morningstar published incorrect returns on its Web site and ranked the fund the top performer in its category.   A representative of the fund told Morningstar March 12 of that year that the data was wrong, but Morningstar did not fix the problem until March 25.   The SEC questioned the delay in fixing the information and whether Morningstar took sufficient steps to correct the data (See  Morningstar Target of SEC Probe).

Joe Mansueto, chairman and chief executive officer of Morningstar, said,”Obviously we’re pleased with the SEC’s decision and are happy to put this matter behind us.”

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