Administration April 3, 2004

State Officials Focus on Fred Alger

March 4, 2004 (PLANSPONSOR.com) - Regulators from three states are investigating possible market timing and late trading transactions in mutual funds managed by Fred Alger Management.
Reported by

The company said in the US Securities and Exchange Commission (SEC) filing that it had received information demands from New York, Massachusetts, and West Virginia officials, Reuters reported.   In its filing, Alger said that it will make “appropriate restitution” if the probes uncover that improper trading hurt their funds’ performance.

In December, James Connelly, Alger’s former vice chairman, was sentenced to serve up to three years in prison for obstructing the probe that New York Attorney General Eliot Spitzer was conducting (See  Fred Alger President Bans Market Timing ). In October, Connelly settled SEC charges that he had made deals to let investors engage in rapid trading in some funds in exchange for putting money into other funds.

Since last September state and federal regulators have charged a string of high-profile mutual fund companies with securities fraud for having permitted improper trading. The investigations have focused primarily on market timing, late trading, and certain sales practices.

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