The Securities and Exchange Commission on Friday charged two former portfolio managers with defrauding a tax-free mutual fund that invests primarily in municipal debt issued in Utah. It appears to be the first such case in which portfolio managers for a registered investment adviser were charged with taking fees from municipal bond issuers, sources said.

Kimball Young, 64, and Thomas Albright, 58, settled separate administrative actions without admitting or denying the SEC’s findings that while managing the Utah fund, they improperly billed issuers for more than $500,000 in undisclosed “credit monitoring fees“ that they pocketed for themselves.

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