Report: Spitzer Grand Jury Continues STC Probe

December 22, 2003 ( - A New York State grand jury is looking into allegations that illegal fund trading at a Phoenix trustee/custodian cost its customers millions of dollars, according to anonymous sources quoted by Reuters

The grand jury could consider handing up criminal indictments after hearing evidence against Security Trust Co, according to the Reuters report.

The latest development came several weeks after state and federal regulators charged senior officers with grand larceny, falsifying business records and securities fraud. Spitzer filed felony charges against the company accusing three former senior executives of “pervasive misconduct” in helping in the late trading of mutual funds and the “larceny” of more than $1 million.

In addition, the US Securities and Exchange Commission (SEC) filed a civil suit against STC and its executives and the US Treasury Department’s Office of the Comptroller of Currency (OCC) announced it had started efforts to dissolve STC ( See STC Ex-Execs Hit With Criminal Charges; Regulators Force Dissolution ).