Administration July 7, 2005

Scandal-Tainted INVESCO Execs Depart

July 19, 2004 (PLANSPONSOR.com) - Two executives and a defendant named in a lawsuit against INVESCO over improper trading are no longer working for it or an affiliated company, a spokesman for the affiliated company said on Saturday.

Reported by

Nevin E. Adams

According to Reuters, Raymond Cunningham, chief operating officer of AIM Investments, and Thomas Kolbe, a senior account executive, left the company on Friday, citing comments from David Bachert, an AIM spokesman in Houston. Last December INVESCO Funds Group and its president and chief executive officer Raymond Cunningham were slapped with parallel state and federal civil fraud lawsuits in connection with allegations of widespread market timing (see Prosecutors: Invesco Engaged in Massive Market Timing Scheme ).

Timothy Miller, a fund manager and former chief investment officer at INVESCO who was also named in the suit brought by New York Attorney General Eliot Spitzer in conjunction with the SEC, also left the company. Miller was reportedly required to sign off on all timing arrangements (see Prosecutors: INVESCO Engaged in Massive Market Timing Scheme ). According to the SEC, from at least July 2001 until October 2003, INVESCO Funds Group (IFG) and Cunningham fraudulently accepted market timing transactions from investors who were dubbed “Special Situations.” These Special Situations were kept secret from the independent members of the funds’ boards and from the funds’ investors. INVESCO’s Senior Vice President of National Sales Thomas Kolbe issued the Special Situations policies.

No reason was given for the three executives’ departure, but all had been on voluntary leave since April. A July 2003 reorganization of AIM and INVESCO sent Cunningham and Kolbe to AIM.

Recently the US Securities and Exchange Commission (SEC) said it will file an amended suit that names additional defendants and makes additional allegations regarding the INVESCO Funds Group (see SEC Says More INVESCO Charges Coming ). ,

Market timing is not per se illegal, but is strictly limited by most fund companies because it can skim profits from longer-term shareholders and increase transaction fees.

In fact, regulators have alleged that during a two-year period ending in June 2003, Canary Capital Partners LLC, the largest timer in the secret program, earned about $50 million by timing INVESCO’s Dynamics Fund, according to Reuters.