 |
Sarbanes-Oxley News & Developments
NY-Attorney General and SEC Bring Criminal & Civil Charges Against Mutual Fund ExecArrest, conviction, and lifetime industry bar for James P. Connelly, Jr.
> > NY Attorney General Eliot Spitzer and the SEC announced the arrest, conviction, and lifetime bar of James P. Connelly Jr., former Vice Chairman and Chief Mutual Fund Officer of Fred Alger & Company, Inc., a prominent mutual fund firm.
Connelly pled guilty to the crime of Tampering with Physical Evidence,a class E felony punishable by up to four years in state prison. The charges stem from repeated efforts to tamper with an ongoing investigation of illegal trading practices in the mutual fund industry.
In its administrative order, the SEC found that Connelly approved agreements that permitted select advisors to time certain mutual funds managed by Alger, a practice that violates an adviser of fiduciary duties and adversely affects the value of the fund being timed. In this case, the timing arrangements were also inconsistent with the public disclosure in prospectuses and statements of additional information filed by Alger with the SEC. Connelly is the first fund executive charged for permitting market timing.
In settling this matter, Connelly neither admitted nor denied the SEC findings. The SEC ordered Connelly to cease and desist from future violations of various provisions of the federal securities laws; bars him from association with any broker, deal or investment advisor; bars him from serving in various capacities with respect to any registered investment company; and imposes a $400,000 civil penalty.
Source: U.S. SEC
Published:2003-10-20
|
|
