Reuters reports that J&W Seligman, an investment advisory firm charged due to the probe, has filed a lawsuit against Spitzer, saying he exceeded his authority by trying to regulate fees. He is being charged with violating the Investment Company Act of 1970, which gives the US Securities and Exchange Commission sole authority to regulate fees.
Spitzer and J&W Seligman have been in settlement discussions since the company revealed publicly last year that it had allowed a Chicago investor to engage in market-timing trades in four of its funds in 2002, Reuters reports. J&W Seligman says during those discussions, Spitzer demanded it lower fund management fees he claimed were “excessive”.
Morningstar recently reported that investors are paying 6% less in annual fund management fees after the fund scandal (See Mstar: Fund Scandal Helped Slash Fees ).
J&W Seligman has suspended settlement discussions with Spitzer.