Spitzer Sees Many Criminal Cases in Funds Probe: NYT
October 12, 2003
New York Attorney General Eliot Spitzer is on a much needed rampage. Read this piece from the New York Times as reported by Reuters.
NEW YORK, Oct 12 (Reuters) - New York Attorney General Eliot Spitzer sees a "significant" number of criminal cases resulting from his probe of mutual fund trading practices, the New York Times reported on Sunday.
Spitzer told the newspaper "the number of broker-dealers and trust companies and similar types of intermediaries that have popped up on our radar screen in the past few weeks is astonishing."
He added, "there will be a significant number of criminal cases in each of those venues."
Last month, Spitzer launched a sweeping investigation of mutual funds after reaching a settlement with a hedge fund that was accused of improper trading of fund shares.
His office and the U.S. Securities and Exchange Commission are examining practices that include after-hours trading of fund shares and improper "market timing" of funds by clients looking to earn quick profits.
Spitzer said his investigation has led him to take a closer look into middlemen who gather mutual fund orders for customers, as well as match buyers and sellers.
The report pointed out that 90 percent of American households that bought mutual funds in 2001 purchased them through an intermediary.