UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 105804 / June 29, 2026

ADMINISTRATIVE PROCEEDING

File No. 3-22435

In the Matter of

The Vanguard Group, Inc. ,

Respondent.

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NOTICE OF PROPOSED PLAN OF

DISTRIBUTION AND OPPORTUNITY

FOR COMMENT

Notice is hereby given, pursuant to Rule 1103 of the United States Securities and

Exchange Commission’s (the “Commission”) Rules on Fair Fund and Disgorgement Plans (the

“Commission’s Rules”), 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted

to the Commission a proposed plan of distribution (the “Proposed Plan”) for the distribution of

monies paid in the above-captioned matter.

On January 17, 2025, the Commission issued the Order instituting and simultaneously

settling administrative and cease-and-desist proceedings against the Respondent. 1 In the Order,

the Commission found that Vanguard made misleading statements concerning potential tax

consequences to investors in the Vanguard Investor Target Funds (“Investor TRFs”). In

November 2020, Vanguard made a recommendation to lower the minimum initial investment

amount for a separate series of Vanguard target date retirement funds designed for institutional

investors ("Institutional TRFs") that resulted in historically larger capital gains distributions and

tax consequences for certain retail investors in the Investor TRFs who held them in taxable

accounts. Vanguard distributed misleading statements in prospectuses for Investor TRFs, that

failed to disclose the potential for increased capital gains distributions for certain investors

resulting from the redemptions of fund shares by newly eligible investors switching from the

Investor TRFs to the Institutional TRFs. The Commission further found that Vanguard failed to

adopt and implement written policies and procedures reasonably designed to prevent violations

of the Advisers Act and rules thereunder with respect to the accuracy of the funds’ disclosures.

The Commission ordered the Respondent to pay $14,700,000 in disgorgement and

$3,500,000 in prejudgment interest, which was deemed satisfied by Vanguard’s payments

Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act

of 1933, Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, and Section 9(f) of the Investment

Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order.

Securities Act Rel. No. 11359 (Jan. 17, 2025).

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totaling $92,910,000 to settle related actions with state regulators. The Commission also ordered

the Respondent to pay a $13,500,000 civil money penalty to the Commission and created the

Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 (“SOX”), so the

penalty paid can be distributed to harmed investors. The Order further specified that the

$92,910,000 in settlement proceeds paid by Vanguard would be received and accepted by the

Commission and added to the Fair Fund pursuant to Section 308(b) of SOX.

In addition, Vanguard’s settlement agreements with state regulators included an offset of

$40 million for Vanguard’s settlement of a class action pending against it in the Eastern District

of Pennsylvania. 2 Because the court in the class action rejected the settlement, Vanguard was

required to pay the additional $40 million to the Fair Fund.

The Fair Fund includes the $146,410,000.00 collected from the Respondent. The assets

of the Fair Fund are subject to the continuing jurisdiction and control of the Commission. The

Fair Fund has been deposited in a Commission-designated account at the U.S. Department of the

Treasury, and any interest accrued will be added to the Fair Fund.

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested persons are advised that they may obtain a copy of

the Plan from the Commission’s public website at

https://www.sec.gov/litigation/fairfundlist.htm. Interested persons may also obtain a written

copy of the Proposed Plan by submitting a written request to Wendy J. Kisch via email at

kischw@sec.gov. All persons who desire to comment on the Proposed Plan may submit their

comments, in writing, no later than thirty (30) days from the date of this Notice:

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to the Office of the Secretary, United States Securities and Exchange

Commission, 100 F Street, NE, Washington, DC 20549-1090;

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by using the Commission’s Internet comment form

(https://www.sec.gov/litigation/admin.shtml); or

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by sending an e-mail to rule-comments@sec.gov.

Comments submitted by email or via the Commission’s website should include “Administrative

Proceeding File No. 3-22435” in the subject line. Comments received will be publicly available.

Persons should submit only information they wish to make publicly available.

THE PROPOSED PLAN

The Net Available Fair Fund 3 is comprised of $146,410,000 in civil money penalties and

payments from Vanguard to settle related actions with state regulators, plus any interest and

In re Vanguard Chester Funds Lit., Case No. 2:22-cv-955-JFM (E.D. Pa.).

All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Proposed

Plan.

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income earned thereon, less taxes, fees, and expenses. The Proposed Plan provides for the

distribution of the Net Available Fair Fund to investors in non-tax advantaged investment

accounts who were allocated excess capital gains by certain Vanguard target retirement funds

during the Relevant Period and suffered a recognized loss as calculated by the methodology used

in the Plan of Allocation.

For the Commission, by the Division of Enforcement, pursuant to delegated authority. 4

Vanessa A. Countryman

Secretary

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17 C.F.R. § 200.30-4(a)(21)(iii).

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