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SEC settles two mutual fund trading cases

AlfredSokol said: "Mutual funds are often thought of as "safe investments." This is not always the case as has been proven by recent [url=http://www.forbes.com/feeds/ap/2007/08/23/ap4048436.html]trading cases[/url] which have no been settled by the SEC. [quote] The Securities and Exchange Commission has approved two more settlements involving improper mutual-fund trading, with two former California hedge-fund managers agreeing to pay $275,000 to settle SEC charges. The SEC on Wednesday submitted for court approval a settlement with Brent Federighi, a former manager for hedge funds Ilytat and Gage, that calls for him to pay a $175,000 civil penalty and to be banned from working for an investment adviser for 18 months. Separately, Michael Hoffman, 44 years old, who founded Ilytat, agreed to pay a $100,000 civil penalty and accepted an 18-month ban on working for an investment adviser. Both men settled without admitting or denying wrongdoing.[/quote] Naughty naughty. Tssk. Tssk."

Pb3190 said: "While it's good the SEC found out and punished them, it does not help any individual investors hurt by their deeds."

LongArm said: "While the practice of late trading by mutual funds is definitely immoral and gives the participants a big advantage, it actually hasn't hurt investors in these funds a whole lot. It's been estimated that late trading has cost investors around .05% per year. Inexcusable, yes--but not exactly something that I'd lose any sleep over."

Pb3190 said: "Thanks for clearing that up LongArm, I didn't know it had such a little effect. Either way, it was wrong of them to do it."

AlfredSokol said: "[QUOTE=LongArm]Inexcusable, yes--but not exactly something that I'd lose any sleep over.[/QUOTE] That's sort of funny how you worded that :) Personally, I would love to see some ethics out of people in the financial world. Business used to place a huge emphasis on integrity and now we have all come to casually accept criminal, unethical, or immoral acts routinely. Some day the whole bottom will fall out of the system if there is no trust."