SEC Fines Van Kampen for Misleading Investors

At the end of December 1996, Van Kampen Investment Advisory prepared to offer investors what seemed like a tantalizing gift. The company's incubator fund had achieved a stunning 63% return for 1996, and soon the public could have a piece.

It wasn't Christmas after all.

Not only were the returns unsustainable for the firm's (VGRBX Quote)Van Kampen Growth fund, but also the fund's managers knew the early returns were heavily based on investments in unpredictable initial public offerings, the Securities and Exchange Commission now says. Yet they declined to warn investors, the agency adds. In an administrative proceeding disclosed Wednesday, the SEC says that Van Kampen and a former official agreed to pay fines for misleading investors, the first ever levied against an incubator fund, the agency says. ...