Vanguard's fine centers on December 2020 actions related to the asset manager's target-date funds and capital gains taxes. Here's what you need to know.

The Malvern investment giant was accused of alleged misleading statements to retail investors in targeted 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 $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.

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 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.