Reply #59: Federated Investors Takes $51M Charge (for illegal trades)

[UpInArms]

http://www.washingtonpost.com/wp-dyn/content/article/2005/04/29/AR2005042900363.html

PITTSBURGH -- Federated Investors Inc. took a $51 million charge related to a pending settlement of illegal trading allegations.

The charge was included in the company's first-quarter earnings report on Thursday.

Federated, the nation's fifth-largest mutual fund manager, acknowledged in late 2003 that a small number of employees had improperly accepted more than 100 illegal, after-hour trades. The company also has said two officers were involved in an arrangement that allowed hedge fund operator Canary Capital LLC to use market timing to sell Federated's domestic funds 46 times over a five-month period.

Market timing of mutual funds, which involves rapid in-and-out trades, is not illegal but is prohibited by many funds because it can disadvantage ordinary shareholders. In many of the cases brought by New York Attorney General Eliot Spitzer and the Securities and Exchange Commission, mutual fund companies allowed favored clients such as hedge funds to engage in market timing.

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I can hardly wait for these CROOKS to get their hands on Social Security monies! :sarcasm: