SEC Probes Pimco Total Return ETF for Possible Mispricing

The Securities and Exchange Commission is investigating Bill Gross' Pimco Total Return ETF on whether it mispriced some bonds for its own gains. This is a different probe than the broader ETF industry sweep, which focuses on the extent of disclosure. Pimco is accused of buying small lots of bonds at a discount, and then marking them up as a group. The SEC will determine if the pricing mechanisms used were appropriate. Pimco acknowledges the investigation but declines to give details. Its spokesman Mark Porterfield said, '[We have] been cooperating with the SEC in this non-public matter, and we take our regulatory obligations and responsibilities to our clients very seriously.' Pimco has faced many hurdles this year, including record redemption in the main fund and the sudden departure of the former CFO.