By Maggie Topkis

(MONEY Magazine) – A three-year-old fund scandal has returned from the dead. In December the SEC filed civil charges against eight current or former Heartland Advisors employees, including president and fund manager William Nasgovitz. Unlike the other fund companies in trouble these days, Heartland is accused of misdeeds that cost investors serious money: The new charges stem from an October 2000 incident in which one of the firm's muni bond funds lost 70% in a single day; a second muni fund lost 44%. (Nasgovitz did not manage either fund.) MONEY published an investigation into Heartland in February 2001.

The drop was the result of a sudden markdown of the funds' mostly junk-grade bonds. The SEC says Heartland misstated the prices of the bonds for months and also misrepresented how risky the funds were. Heartland has said it will "vigorously contest" the charges, and Nasgovitz has specifically denied an SEC claim that he pulled a pal out of the funds just in time. --MAGGIE TOPKIS