Spitzer Market Timing Allegations not Over Yet

September 26, 2006 (PLANSPONSOR.com) - The office of New York State Attorney General Eliot Spitzer announced it filed a complaint against mutual fund manager J. & W. Seligman & Company and current President Brian Zino, alleging the firm approved numerous secret timing arrangements that cost small investors $80 million.

According to the Spitzer press release, Seligman had previously claimed its own investigation found only four cases of timing arrangements that caused only $2 million in damage. Spitzer’s office had disagreed with that claim and was granted a court order requiring the firm to make documents and employees available for investigation.

The Attorney General’s office found 35 previously undisclosed agreements with mutual fund timers, the release said. During the period from 1998 to 2001, Seligman tracked and tolerated the activities of those agreements, and did little or nothing to stop them.

According to the Spitzer allegations, one timer was allowed to conduct 400 “round trip” exchanges in six Seligman funds during this period, when regular investors were limited to eight exchanges per fund each year.

The lawsuit names the company, its president, and its fund distributor and shareholder services agent, and seeks injunctive relief, disgorgement of fees and profits, and restitution and penalties.

The Spitzer news release is here .