SEC Probing Late Trading at Fremont

July 6, 2004 ( - Fremont Mutual Funds, which uses outside managers revealed Tuesday that the US Securities and Exchange Commission (SEC) is investigating the company for late trading in its fund shares.

SEC staff notified the funds’ adviser in June it planned to amend a January “Wells notice” to add allegations that the adviser had been involved in late trading transactions by a broker-dealer in fund shares in 2001, a regulatory filing by Fremont said last week, CBS MarketWatch reported.

SEC staff also said they planned to recommend action against an employee of the San Francisco-based Fremont for “aiding and abetting” the alleged late trading by the broker-dealer.

State and federal regulators have been pursuing a wide-ranging investigation of the mutual fund industry primarily focused on market timing and late trading practices.