$52.5-Million Investor Education Fund Set Up

In the largest U.S. investor education effort ever, a $52.5-million fund is being set up to promote investment knowledge, with money paid by Wall Street to settle charges of misconduct by research analysts.

The Securities and Exchange Commission said Thursday that Charles Ellis, author of books on investing and founder of consulting firm Greenwich Associates, would chair the fund.

The fund was first championed by SEC Commissioner Cynthia Glassman when the agency was working out a $1.4-billion settlement with Wall Street over charges that analysts had hyped 1990s tech-boom stocks that they privately had disparaged.

Seven firms agreed to pay the $52.5 million over five years into an investor education fund.

The SEC said the board would consider “grant proposals for ... grass-roots and community-based education, workplace investor education initiatives, academic research into techniques or programs most likely to be successful and programs to educate American investors about how to avoid fraudulent investments.”