Hedge Funds

Mutual fund timing prosecutions continue

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The SEC and the New York State Attorney General Eliot Spitzer, on October 21, stepped up their prosecution of market-timing abuses with their first arrest and conviction of a fund executive for permitting the practice.

In an administrative order, the SEC alleged that James P. Connelly, Jr., a former vice chairman and chief mutual fund officer at Fred Alger & Co. of New York had, for several years, permitted certain investors to 'time' their investments in Alger mutual funds in violation of the company's fiduciary responsibilities and the funds' prospectuses.

Without admitting or denying the charges, Connelly pleaded guilty to