SEC Finds MF Manager "Socially Ir-responsible"

New Hampshire-based Pax World Management Corp. will pay $500K to settle SEC charges that it violated investment restrictions in its socially responsible mutual funds.  Investors had been told the funds would not contain securities issued by companies involved with producing weapons, alcohol, tobacco or gambling products.  Several socially responsible MF's - including the Pax World Growth Fund and Pax World High Yield Fund - purchased at least 10 securities that the funds were prohibited from buying.  A company is on the restrict list when more than 5% of their revenue is derived from contracts with the U.S. Dept of Defense, or the company failed to satisfy the Funds' environmental or labor standards. 

Pax World allegedly failed to consistently follow its own internal SRI-related policies and procedures that required that all new securities be screened by Pax World's Social Research Department prior to purchase to ensure compliance.  Pax World failed to screen 8% of all new securities purchases from 2001 to 2005.  [SEC PR 8-157, 7/30]