Former Evergreen portfolio manager, Lisa Premo, has been found by an SEC Administrative Law Judge to have willfully aided and abetted and willfully caused violations of securities laws due to her role in mispricing securities held in the Evergreen Ultra Short Opportunities Fund in 2007. The judge found that Premo withheld material negative information about a $13 million bond investment being fair valued by the fund. The SEC believes that the fund was overvalued by as much as 17% at one point because this information was not taken into account when the fund’s securities were fair valued.
In 2009, the fund’s adviser and distributor settled a related action with the SEC, agreeing to pay more than $40 million for its alleged valuation failures. Evergreen closed the Ultra Short Opportunities Fund in June 2008 in the wake of substantial redemptions by fund shareholders following the fund’s re-pricing of its holdings.
The decision against Lisa Premo was an Initial Decision and may be appealed to the Commission.