Asset management giant Vanguard has been fined more than $100 million to settle charges related to disclosures around target date investment funds, the Securities and Exchange Commission announced Friday.

The alleged violations stem from a 2020 change where Vanguard lowered the minimum investment requirement for its institutional target date funds. The SEC order found that the change spurred redemptions as Vanguard customers moved from other target date funds into the institutional versions, creating taxable distributions for some of the remaining shareholders. The SEC said Vanguard failed to properly disclose the potential impact of the investment threshold changes on distributions.

“The order finds that, as a result, retail investors of the Investor TRFs who did not switch and continued to hold their fund shares in taxable accounts faced historically larger capital gains distributions and tax liabilities and were deprived of the potential compounding growth of their investments,” the SEC said in a press release.

The fine of $106.41 million will be distributed to harmed investors, the SEC said. Vanguard agreed to the fine without admitting or denying the SEC’s findings.

Vanguard is one of the world’s largest asset managers, reporting more than $10 trillion of global assets as of last November. The firm was founded by Jack Bogle in the 1970s and has a reputation as a low-cost, investor friendly firm.

“Vanguard is committed to supporting the more than 50 million everyday investors and retirement savers who entrust us with their savings. We’re pleased to have reached this settlement and look forward to continuing to serve our investors with world-class investment options,” Vanguard said in a statement.

Target date funds are a popular retirement vehicle designed to slowly shift from a growth-oriented portfolio to a conservative portfolio as the listed year approaches. Typically, this is done by replacing riskier stocks with higher exposure to income-generating bonds as the retirement date nears.

The fine highlights how investors can see large tax bills even when they themselves do not make any asset sales during a calendar year. When Vanguard dropped the minimum initial investment for its institutional target retirement funds to $5 million from $100 million in December 2020, it spurred retirement plan investors to cash out of the investor share class of these funds and swap into the institutional version, according to the SEC.

Vanguard then had to sell the underlying assets in the investor share class of the funds to meet the redemptions from departing investors, the SEC found. As a result, shareholders who stayed in the investor share class were subject to a large capital gains distribution — and a tax liability if they held the fund in a taxable brokerage account, according to the order.

Normally, target date funds remain in tax-deferred accounts like 401(k) plans or individual retirement accounts — which would avoid a tax hit from a large capital gains distribution.

The SEC’s order said Vanguard’s investor-series target funds saw $130 billion in redemptions from December 2020 to October 2021, up from $41 billion in the same period a year prior. Vanguard later merged the two series of funds together, which the SEC order said the company refrained from doing originally in part to preserve fee revenue.

The fine announced Friday is in addition to the $40 million Vanguard had agreed to pay to investors as part of a class action suit.

The timing of the target date fund changes is similar to another recent Vanguard legal run-in. In 2023, Vanguard was fined $800,000 by the Financial Industry Regulatory Authority related to problems with account statements for money market funds in 2019 and 2020.

The alleged violations took place under former CEO Tim Buckley. The current CEO, Salim Ramji, joined Vanguard from BlackRock in 2024.

A group of high powered investors want to raise billions to form a new international basketball league, according to people familiar with the matter.

The new organization would offer players equity, those people said.

The investors aim to raise $5 billion for the league, which could serve as a rival to the NBA if it can offer big-money deals to players, similar to how LIV Golf lured away PGA Tour players.

It’s unclear which players the league would target or when it could start.

Maverick Carter, LeBron James’ longtime friend and business partner, is advising a group that includes investment firm SC Holdings’ Jason Stein and Daniel Haimovic, Skype co-founder Geoff Prentice and former Facebook executive Grady Burnett.

A representative for James said he is not involved in the effort and declined to comment on whether the Los Angeles Lakers star has been approached to participate.

The group is working with UBS and Evercore to help raise the money, which is expected to come from a mix of sovereign wealth funds, institutional investors and wealthy individuals, the people said.

The unnamed league is expected to play games in eight cities around the world, spending two weeks in each city, following a model similar to Formula 1. The league will consist of 12 teams — six men’s and six women’s teams.

Singapore is one of the markets where games will take place, the people said. It’s unclear what the other seven markets will be.

Representatives for the NBA didn’t immediately respond to a request for comment.

But a source familiar said they were not aware of the plan for the league before reports about it emerged Wednesday. Bloomberg first reported the news.

In recent years, the NBA has ramped up its international presence, with a league in Africa and games abroad ranging from China to the UAE, Mexico City and Paris. The league also had a record-tying 125 international players tip off in the 2024 season.

American Express will pay a total of about $230 million to resolve federal wire fraud investigations, and to settle civil allegations of deceptive marketing, the company said Thursday.

The tally includes more than $138 million as part of a non-prosecution agreement with the U.S. Attorney’s Office in Brooklyn, New York, related to allegations that American Express gave customers “inaccurate tax advice” for two wire products.

Separately, the banking giant will pay $108.7 million to resolve civil claims by the Department of Justice’s Civil Division that it deceptively marketed credit cards to small businesses, among other allegations.

Amex said it has also reached an “agreement in principle with the Staff of the Board of Governors of the Federal Reserve System,” which it expects to finalize in the coming weeks.

“Pursuant to the agreements and after crediting, American Express will pay approximately $230 million in total to resolve these matters,” Amex said.

The big settlement follows recent agreements by other large companies, including Mastercard and Block, to settle claims from prosecutors or regulators.

“American Express misled their customers by touting tax breaks that simply didn’t exist,” said Harry Chavis, special agent in charge for the IRS’s New York criminal investigation division in New York, in a statement.

Chavis said, “This deceitful marketing campaign … involved hundreds of employees defrauding their customers and the government.”

Prosecutors said in a press release that Amex — in 2018 and 2019 — launched the wire products Payroll Rewards and Premium Wire, which were “marketed as a means to generate tax savings.”

Customers, which primarily included small- and mid-sized businesses, were told that the fees from the wire payments were tax-deductible as a business expense and that the customers otherwise would have paid taxes on the fees, prosecutors said.

Customers also were told that “Membership Reward” points, received in exchange for the transactions, were earned tax-free, and therefore outweighed the true cost of the fees.

But that pitch “relied on incorrect tax advice, namely, that the wiring fee was deductible in its entirety as a business expense,” prosecutors said.

“Incurring a wiring fee—far in excess of that offered by competitors in the marketplace—for the purpose of generating a personal benefit is not an ‘ordinary’ and ‘necessary’ business expense,” as is required, they said.

An internal investigation into those marketing practices in early 2021 led to about 200 employees being fired, prosecutors said. By November of that year, the two products were discontinued entirely.

The separate civil settlement announced Thursday centered on allegations that AmEx “deceptively marketed credit cards” through “an affiliated entity that initiated sales calls to small businesses.”

The practices, which took place from 2014 through 2017, included “misrepresenting the card rewards or fees” and “whether credit checks would be done without a customer’s consent,” the DOJ said.

The practices also allegedly included “submitting falsified financial information for prospective customers, such as overstating a business’s income.” 

Amex also allegedly tried to “deceive its federally insured financial institution” to let small-business customers acquire credit cards without the legally required employer identification numbers — known as EINs.

“The United States alleged that American Express employees used ‘dummy’ EINs such as ’123456788′ in opening small business credit cards in 2015 and the first half of 2016,” the DOJ said.

Amex’s settlement agreement with the DOJ’s Civil Division does not include an admission of liability or wrongdoing by the company, which denied the allegations about the EINs and deceptive credit card sales practices.

“When financial companies engage in deceptive sales tactics or falsify information to cover up a failure to follow applicable regulations, they threaten the integrity of our financial system,” principal deputy assistant Attorney General Brian Boynton, head of the Civil Division, said in a statement.

“Today’s settlement makes clear that the department will hold accountable those who violate the trust placed in them to follow the rules governing our financial institutions and to be truthful about their business practices,” Boynton said.

The U.S. Food and Drug Administration formally authorized Zyn nicotine pouches for sale after conducting an ‘extensive scientific review’ about their safety.

In a release Thursday, the agency said it had found that the popular pouches posed lower risk of cancer and other serious health conditions compared with cigarettes, as well as in relation to other smokeless tobacco products.

The agency also found that the pouches even had the potential to benefit cigarette smokers amid evidence that they can get them to quit.

‘The data show that these nicotine pouch products meet that bar by benefiting adults who use cigarettes and/or smokeless tobacco products and completely switch to these products,” Matthew Farrelly, director of the office of science in the FDA’s Center for Tobacco Products, said in a statement. 

Zyn use has exploded in recent years in the wake of a viral online meme trend, even prompting a shortage last year. Yet the product had been operating in a legal gray area while it underwent official FDA review about its health effects and uptake among young users.

To that latter point, the FDA found that, so far, Zyn use among youths appeared to be relatively low, though it was continuing to monitor the trend.

A spokesperson for Philip Morris International Inc., which owns the U.S. rights to Zyn, did not immediately respond to a request for comment.

Swedish Match, the developer of Zyn, said in a statement, “The FDA’s authorization of all ZYN nicotine pouches currently marketed by Swedish Match in the U.S. is an important step to protect the public health by providing better alternatives to cigarettes and other traditional tobacco products for adults 21+.”

The Campaign for Tobacco-Free Kids slammed the FDA’s decision in a separate statement.

‘The FDA today has set a dangerous precedent that puts the nation’s kids at risk by authorizing the sale of 20 Zyn nicotine pouch products with flavors that clearly appeal to kids, including chill, citrus, cool mint and peppermint,’ it said.

‘The FDA’s decision is deeply troubling given the extensive scientific evidence that flavored tobacco products appeal to kids and the fact that nicotine pouches were the only category of tobacco product that saw an increase in youth use last year. The FDA is sanctioning a flavored tobacco product that is already increasing in popularity with kids and repeating the mistakes it made with Juul that resulted in the youth e-cigarette epidemic.’

In the release, the FDA emphasized that its findings about Zyn did not mean the products are ultimately safe or “FDA approved.”

‘There is no safe tobacco product,’ the agency said. ‘Youth should not use tobacco products and adults who do not use tobacco products should not start.’

The CEO of UnitedHealth Group said Thursday that shortcomings of America’s health care system must be addressed.

On the company’s first earnings call since the fatal shooting of UnitedHealth executive Brian Thompson, CEO Andrew Witty said that while the U.S. provides world-leading care in many respects, there are systemic flaws that are working to drive up health costs for people in the country. 

“The health system needs to function better,” he said, adding that the “variety” of state, federal and private sector structures and programs have created a “confusing,” “complex” and “costly” health care landscape. 

Witty began the call expressing gratitude for the condolences received in the wake of Thompson’s death.

“Many of you knew Brian personally,” Witty said, referring to the investors on the call. “You knew how much he meant to all of us and how he devoted his time to help make the health system work better for all of the people we’re privileged to serve.”

The suspect charged in Thompson’s killing, Luigi Mangione, is currently being held without bond in Brooklyn. He faces capital murder charges, to which he has pleaded not guilty. 

While past UnitedHealth earnings calls have featured general remarks about the company’s desire to deliver improved outcomes for its customers, Witty’s comments Thursday acknowledged the broader debate about the state of U.S. health care that has emerged in the wake of Thompson’s shooting. 

Witty’s remarks came as United Health reported record 2024 revenues. Shortly before Thompson was killed, its stock price was at an all-time high.

Prior to addressing the company’s financial performance, Witty discussed some of the shortcomings of the profit-driven model of U.S. health care head on.

“Participants in the system,” he said, derive benefit from high health care costs. While lower prices and improved services can be good for consumers and patients, Witty said, they can “threaten revenue streams for organizations that depend on charging more for care.”

Witty did not discuss to what extent UnitedHealth itself was a beneficiary of such circumstances. 

When it comes to drug costs, for example, he said U.S. health care participants “pay disproportionately more than people in other countries,” citing the cost of the weight loss drug GLP, which he said in Europe costs approximately one-tenth its price in the U.S. 

Witty directly blamed drug companies for discrepancies like those, while stating that UnitedHealth’s pharmacy-benefit managers (PBM), who help negotiate retail drug prices and who have come under increasing public pressure for their role in setting drug prices, continue to work to pass savings on to customers. 

UnitedHealth’s improved PBM performance “will help make more transparent who is really responsible for drug pricing in this country: the drug companies themselves,” Witty said, without elaborating.

In a statement late Thursday, a representative for PhRMA, which represents drug companies, pushed back on Witty’s assertion.

‘Congress, the FTC, state attorneys general, and others who have looked at this issue have all come to the same conclusion that PBM abuses are driving up costs,’ Alex Schriver, PhRMA senior vice president of public affairs, said in an email.

‘Investigations have exposed big insurer and PBM companies for charging thousands of different prices for the same medicines at the same time. The FTC just released a second report showing the same companies mark up medicines at their own pharmacies 10 times or more.’

‘These big health care conglomerates make billions in profit from controlling what medicines people get, the price they pay and what pharmacy they can use. That’s why there’s unprecedented bipartisan support for holding them accountable.’

For the quarter, UnitedHealth reported worse-than-expected results, sending its shares down more than 4% Thursday.  

“Health care in every country is complex and the solutions are not simple, but you should expect this company to continue to work at it,” Witty stated. 

CORRECTION (Jan. 16, 2025, 9 p.m. ET): A previous version of this article misstated how much the weight loss drug GLP costs. It is one-tenth of its U.S. price in Europe, not one-tenth less.

The Federal Trade Commission said Friday that it is suing PepsiCo for illegal price discrimination, alleging the food and beverage giant gave an unnamed retailer more favorable prices than its competition.

Walmart is the unnamed retailer, people familiar with the matter told CNBC.

The FTC alleges Pepsi violated the Robinson-Patman Act, which bars sellers from giving competing buyers different prices for the same “commodity” or selectively providing allowances, like compensation for advertising. The agency argues Pepsi gave Walmart promotional payments and allowances, as well as advertising and promotional tools, that it didn’t offer to the retail giant’s rivals.

Pepsi denied the allegations and said the FTC’s lawsuit is wrong, both factually and legally.

“PepsiCo strongly disputes the FTC’s allegations, and the partisan manner in which the suit was filed. We will vigorously present our case in court,” the company said in a statement to CNBC. “PepsiCo’s practices are in line with industry norms and we do not favor certain customers by offering discounts or promotional support to some customers and not others.”

Walmart did not immediately respond to a request for comment from CNBC.

The complaint, which was filed in the Southern District of New York, is currently sealed.

The FTC also said that a “substantial portion” of the alleged violations are redacted in the lawsuit, citing legal protections given to Pepsi and the large, big box retailer. The commission is seeking to lift the redactions to show how Pepsi broke the law and how those alleged actions led to higher prices for competing retailers.

The Robinson-Patman Act was passed in 1936, but the federal government stopped enforcing it during the deregulation of the 1980s. The FTC resumed its enforcement in December when it sued Southern Glazer’s, the largest U.S. distributor of wine and spirits.

The lawsuit comes on the final business day before President-elect Donald Trump’s inauguration on Monday, which will spell the end of Lina Khan’s time as chair of the FTC. Her Republican successor, Andrew Ferguson, currently serves on the commission and released a statement dissenting against the decision to sue Pepsi.

The Biden administration has taken a flurry of legal action against companies and corporate executives in its final days, targeting Capital One, Southwest Airlines and Elon Musk, among others.

— CNBC’s Mary Catherine Wellons contributed reporting for this story.

An outage affecting Capital One customers dragged into its second day Friday, further preventing some customers from accessing deposits, payments and transfers.

In an afternoon statement, the bank said it was still restoring systems that had been taken offline due to a technical issue with a third-party vendor.

The vendor, Fidelity Information Services (FIS), based in Jacksonville, Florida, released a statement saying a local power outage had affected a data center that was critical to various applications.

On Friday, FIS said it had restored access to the applications and was working with impacted clients to post transactions that occurred while systems were offline.

‘Most, if not all, of that work’ would be completed Friday, the company said.

In an email to customers late Thursday, Capital One said it had expected the majority of issues to be resolved by Friday morning.

Yet according to DownDetector.com, there were still hundreds of reports of issues as of 9 a.m. ET Friday.

And on social media, Capital One acknowledged the issues were ongoing, with one bank representative telling an X user it continued to work ‘around the clock to restore full functionality as soon as possible.’

The issues at Capital One after Citibank acknowledged a problem affecting customers’ ability to access their accounts from mobile devices, as well as an apparent issue related to fraud alerts.

It is not clear whether FIS was also involved in the Citi outage.

Earlier this month, the Consumer Financial Protection Bureau sued Capital One, alleging it misled customers about its savings-account offerings. Capital One has denied the allegations.

This is a developing story. Check back for updates.