Federal and state regulators have unleashed a barrage of requests for information about market timing and after-hours trading of mutual fund shares as part of broad new inquiries into the industry.<\/p>\n
Secretary of State William Galvin’s staff sent requests to several fund firms, including Boston-based Eaton Vance, yesterday as part of a probe into possible market-timing at the Boston office of Prudential Securities.<\/p>\n
“At this point, we are gathering information through document request letters from various mutual fund companies relative to our Prudential investigation,” said Matthew Nestor, chief of Galvin’s securities division.<\/p>\n
Meanwhile, the U.S. Securities and Exchange Commission has sent letters to about 100 large fund firms and brokerages to ask how they deal with the market timing and after-hours trading of mutual fund shares. SEC spokesman John Nester said the agency sent the letters in response to problems disclosed by New York Attorney General Eliot Spitzer.<\/p>\n
On Wednesday, Spitzer said he had proof that a hedge fund collaborated with several mutual fund firms to get trading advantages not available to average investors.<\/p>\n
The primary focus of Spitzer’s ongoing probe involves market timing – short-term trades of fund shares to take advantage of the time it takes for a fund’s net asset value to catch up with the value of its underlying shares.<\/p>\n
The practice is not illegal, though many fund companies say they take aggressive steps against it because it tends to drive up fund costs and hurt long-term investors.<\/p>\n
Christine Bruenn, the head of a state regulators’ association, said she doesn’t think her group should seek a multistate task force to deal with the issue. Her group’s multistate probe into Wall Street investment banks led to a $1.4 billion settlement this year.<\/p>\n
But Bruenn, Maine’s securities administrator, said a probe of this scope should be up to the SEC instead.<\/p>\n","protected":false},"excerpt":{"rendered":"
Federal and state regulators have unleashed a barrage of requests for information about market timing and after-hours trading of mutual fund shares as part of broad new inquiries into the industry. Secretary of State William Galvin’s staff sent requests to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-961","post","type-post","status-publish","format-standard","hentry","category-hedgeco-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/961","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=961"}],"version-history":[{"count":0,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/961\/revisions"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=961"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=961"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=961"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}