The Reserve announced on its website that the SEC will bring enforcement action against Reserve Management and the Bents. In a release posted last night entitled, "`Important Notice Regarding Reserve Management Company, Inc.," Reserve says, "Reserve Management Company, Inc. serves as the investment adviser to each of the Reserve funds that are registered with the Securities and Exchange Commission under the Investment Company Act of 1940. On December 18, 2008, the staff of the SEC's Division of Enforcement informed counsel to RMCI of the SEC staff's intention to recommend that the SEC bring an enforcement action against RMCI alleging violations of certain provisions of the federal securities laws. The staff also gave notice of its intention to recommend enforcement actions against Bruce Bent, President of RMCI and President and Chairman of the Board of each Fund, against Bruce Bent II, Senior Vice President of RMCI and Co-Chief Executive Officer of each Fund and against Arthur Bent III, Chief Operating Officer and Treasurer of RMCI and Co-Chief Executive Officer of each Fund. RMCI, Mr. Bruce Bent, Mr. Bruce Bent II and Mr. Arthur Bent III expect to defend vigorously against the allegations. Each Fund, through the independent members of its Board of Trustees, intends to cooperate fully with the SEC staff regarding this matter." See also Bloomberg's coverage in "Reserve Says SEC May Allege Securities Violations". Finally, note the apparent reincarnation of Reserve's FDIC insured bank sweep division as the new company Intrasweep.
