Federated Investors Settles to the Tune of $100 Million

Via the International Herald Tribune:

Federated settles late-trading charges

By Danielle Kost
Bloomberg News
November 29, 2005

Federated Investors, a U.S. money manager, said Monday that it had agreed to pay $100 million to settle regulatory allegations that it allowed traders to buy and sell mutual funds in ways that hurt long-term investors.

Federated will pay $35 million in restitution, $45 million in penalties and cut fees by $20 million over the next five years under agreements with the U.S. Securities and Exchange Commission and the New York State attorney general, Eliot Spitzer, Spitzer said in a statement. Federated did not admit to or deny regulators' findings as part of the settlement, the securities regulator said.

The Pittsburgh company is the 14th investment company to resolve claims of improper trading in the $8.1 trillion fund industry. The announcement comes after two setbacks for Spitzer's office, including a decision last week to drop charges against a former Canadian Imperial Bank of Commerce executive who was indicted in connection with alleged improper fund trading...

More in the full article, including details of two recent setbacks for Eliot Spitzer's office.

-- MDT