Fremont Funds posted a message on its Web site saying an internal review of its Fremont Investment Advisors division revealed “the past existence of market- timing arrangements with a few clients that may have been inconsistent” with the policy of the firm. The company went on to say these arrangements were terminated, the last of which more than a year ago, according to a Dow Jones report.
“Most of the funds did not experience timing transactions under those arrangements, and the few management personnel who we believe may have initiated, negotiated, or approved those arrangements are no longer employees” for unrelated reasons, Fremont’s statement said. Fremont has 13 mutual funds with assets of about $3 billion.
The review by the San Francisco-based investment adviser came after Fremont received inquiries about its fund trading activities from New York Attorney General Eliot Sptizer and the US Securities and Exchange Commission (SEC). In addition to the review of the company’s policies, Fremont also announced it was taking steps to “reinforce its policies and procedures to detect market timing.” A committee of independent directors, the same group the conducted the review, would also be responsible for taking “appropriate remedial action when necessary,” the statement said.
Similar reviews have uncovered past market timing arrangements at other mutual fund companies in recent months. Among those were Janus (See ICMA-RC Shutters Putnam, Janus Offerings ), and Wilshire (See SEC Examining Wilshire Mutual Fund Trades ).
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