Poster
09-10-2003, 10:00 AM
The SEC is launching an extensive investigation into the mutual fund trading practices of Prudential Securities’ Boston office. Investigators have already begun interviewing employees and confiscating documents. The query was sparked by both state and federal findings of improper trading procedures at other brokerage firms.
“The Massachusetts Securities Division is looking into allegations that several Prudential brokers have made a multimillion-dollar business of trading in and out of mutual funds to make quick profits at the expense of long-term shareholders, a practice known as market timing.”
Prudential, who recently merged with Wachovia, admits that it found evidence as early as last year that some of its traders were illegally profiting from trades. The corporation claims it immediately implemented new policies to end the practice at its firm.
“Most fund groups have rules prohibiting or limiting the practice, because it tends to increase trading costs for the funds and force managers to deal with large amounts of short-term cash, which can inhibit the strategies they would use otherwise.”
For more information go to: http://www.boston.com/business/globe/articles/2003/09/09/sec_opens_probe_in_boston/
“The Massachusetts Securities Division is looking into allegations that several Prudential brokers have made a multimillion-dollar business of trading in and out of mutual funds to make quick profits at the expense of long-term shareholders, a practice known as market timing.”
Prudential, who recently merged with Wachovia, admits that it found evidence as early as last year that some of its traders were illegally profiting from trades. The corporation claims it immediately implemented new policies to end the practice at its firm.
“Most fund groups have rules prohibiting or limiting the practice, because it tends to increase trading costs for the funds and force managers to deal with large amounts of short-term cash, which can inhibit the strategies they would use otherwise.”
For more information go to: http://www.boston.com/business/globe/articles/2003/09/09/sec_opens_probe_in_boston/