former chief investment officer have reached a settlement with regulators over charges that they misled investors about a mutual fund's performance potential.

The case is the first of its kind brought by the Securities and Exchange Commission. In the settlement, Van Kampen Investment Advisory Corp. and Alan Sachtleben, its former chief investment officer, agreed to be censured, to cease and desist from violating federal antifraud and reporting provisions, and to pay $100,000 and $25,000 civil penalties, respectively.

Van Kampen and Mr. Sachtleben failed to disclose material facts concerning the effects of hot initial public offerings on their "incubator" growth fund's 1996 performance, the SEC said in announcing the settlement Wednesday. The company and Mr. Sachtleben neither admitted nor denied the commission's findings.

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