Additional information: July 3: 529 plan 'chance to help kids'

The Securities and Exchange Commission on Thursday filed a civil action in U.S. District Court against fired Utah Educational Savings Plan director Dale C. Hatch.

The SEC this week also announced a settlement with the UESP itself, accusing the plan of publicly making untrue statements and omissions about the college fund's operations and accounting procedures after Hatch's firing last year.

Hatch, 55, pleaded guilty in 2005 to felony theft after transferring $85,000 of UESP funds into personal accounts. Those funds came from almost $506,000 he misappropriated within Utah's only so-called "529 college savings plan." Such plans are named after the section of federal tax code that established them and offer a tax advantage for investors who want to save for future college expenses.

Hatch, who was with UESP from 1996 to July 2004, served 30 days in jail and received a suspended prison sentence. Court documents say Hatch lives in Kearns, is an attorney, an active member of the Utah State Bar and a certified public accountant.

The SEC also said UESP in two media releases mischaracterized the money Hatch misappropriated as "administrative" funds — they were unallocated gains on investor accounts — and that UESP falsely claimed investors had not been harmed.

"The press releases were well intended — they came out very quickly, the day after Dale was fired," said Lynne Ward, the new UESP director. The releases were written before Ward took over.

An SEC press release Thursday called its charges against Utah's 529 savings plan the first ever for this type of college fund. Each state has at least one 529 plan, with at least 70 different versions for what experts say is a relatively new industry, one not under the direct jurisdiction of the SEC.

The SEC says it also went after Hatch separately to further protect the public.

"We feel his conduct was pretty egregious," said Ken Israel, district administrator for the SEC's Salt Lake District Office. "This guy was the director of UESP and he was charged with looking out for the investments of participants in the plan — and instead he basically stole money that should have gone to plan participants."