Bridgeway Capital Management, Inc. and John Noland Ryan Montgomery

On September 15, 2004, the SEC instituted and simultaneously settled administrative and cease-and-desist proceedings against Bridgeway Capital Management, Inc. and its founder John Noland Ryan Montgomery. The SEC found that between July 1995 and March 2004, Bridgeway Capital, at the direction of Montgomery, charged three of the Bridgeway Funds more than $4.4 million in excessive performance fees. As part of the settlement, Bridgeway Capital must pay the $4.4 million plus prejudgment interest (totally nearly $4.9 million) to reimburse affected fund shareholders. The Funds affected were the “Aggressive Investors 1” fund, the “Aggressive Investors 2” fund, and the “Micro-Cap Limited” fund. For more information about the SEC’s action, you can read Administrative Proceeding Release No. 2294 (Sept. 15, 2004).

Under the terms of the SEC's Order, an independent distribution consultant must submit a distribution plan to the SEC within 135 days of the entry of the Order by the SEC. Upon submitting the plan, it will be published for public comment. Once the plan is approved, the SEC will post notice of the Plan of Distribution on this web page.

http://www.sec.gov/divisions/enforce/claims/bridgeway.htm