Canary’s abusive trading practices sparked a mutual fund industry probe in 2003 (See Spitzer Fund Abuse Probe Pumps Out More Subpoenas).
Reuters reports that Stern, Canary and two related units of the company — Canary Capital Investment LLC and Canary Capital Partners Ltd. — reached a settlement to resolve allegations they market-timed mutual funds and engaged in illegal late trading, according to a New Jersey consent order. In addition, Stern agreed to be barred for 13 years from managing or investing assets of third parties, except his own or those of 100% family-owned businesses.
New Jersey Attorney General Peter Harvey and Franklin Widmann, chief of the state Bureau of Securities said Canary engaged in abusive trading of mutual funds through schemes and other means that concealed or otherwise disguised its activities, according to Reuters.
Neither Stern nor the Secaucus, New Jersey-based Canary entities admitted or denied the allegations.