In addition to the $40 million Vanguard agreed to pay to investors as part of a class action suit in November, the SEC now finds that the firm did not provide retail investors accurate information about the capital gains and tax implications of a change to investment minimums.

The violations stem from a 2020 change where Vanguard lowered the minimum investment requirement for its institutional target date funds.

An investigation by the S.E.C. and several states found that the company had failed to notify investors of changes in the terms of some funds, leading to higher capital gains taxes.

Vanguard Group will pay $106.4 million to settle U.S. Securities and Exchange Commission charges alleging it failed to disclose important tax information about its popular target-date funds, resulting in hundreds of thousands of ordinary investors getting stuck with inflated tax bills.

The regulator determined that the firm failed to provide accurate details regarding the capital gains and tax consequences associated with a change in investment minimums.

The $106.41 million penalty will be paid out to hundreds of thousands of investors, whom investigators say Vanguard failed to adequately inform of a critical change to its retirement funds.

Vanguard Group will pay more than $106 million to settle US Securities and Exchange Commission allegations that it made misleading statements about capital gains distributions and tax consequences to retail investors who held popular target-date retirement funds in taxable accounts.

The SEC said a lack of notifications by Vanguard drove higher capital gains tax bills for many retail investors.

Vanguard, one of the largest mutual fund companies in the United States agreed to pay investors $106 million, CNN reports.

Regulators penalized Vanguard over allegedly misleading statements after the company made changes to target-date funds that stuck some investors with big tax bills.