Socially responible oil exploration?
Posted on July 30th, 2008 – 2:30 PMBy Kara McGuire
So my cubicle neighbor Casey Common alerted me to this ironic and sad AP story earlier today about socially responsible investing stalwart Pax breaking its ethics code and investing in industries that clients explicitly want to avoid such as oil and gas exploration, gambling, and alcohol. Geez Louise, Pax, that’s why investors picked you in the first place! What’s next, are you going to give money to the NRA?
Here’s the full release from the SEC on the violations and the administrative proceeding for you real nerds out there.
Here’s an excerpt from the AP story:
Pax World Management Corp. has agreed to pay a $500,000 fine because it failed to follow its own socially responsible investing criteria over a five-year period, when two of its mutual funds invested in off-limits industries such as gambling and liquor, and oil and gas exploration.
Portsmouth, N.H.-based Pax, a pioneer in the growing socially responsible investing niche, agreed to pay a penalty to resolve civil charges announced Wednesday by the Securities and Exchange Commission.
David Bergers, head of the SEC’s Boston office, said it apparently was the first case the agency has brought alleging violations by a mutual fund firm that purports to use social as well as financial screening criteria in making investments.
According to the SEC, the Pax World Funds held at least one prohibited security at all times from 2001 through early 2006. Shame, shame. There were lots of personnel changes as a result and the fund managers are no longer with the company. But where was the company oversight? Where was the board?
And for what? The two-star Pax World Growth Fund (PXWGX) underperformed Morningstar’s mid-cap growth category and the S&P 500 for the three and five year period.
Its high-yield fund fared better, but that’s no excuse!
Pax fund users or socially reponsible investing proponents, does this shake your confidence?
