Alliance Capital is close to settling with New York Attorney General Eliot Spitzer, according to reports this morning.

"We have been in discussions with Alliance and in consultation with the [ SEC] regarding possible settlement," Paul Laraby, a spokesman for New York Attorney General Eliot Spitzer, told Reuters. The fine for the $427 billion fund shop could top $250 million – the largest settlement ever for any fund company, according to The Wall Street Journal.

But the talks are being stalled by Spitzer’s holdout that Alliance cut the fees it charges investors, a source close to the negotiations told Reuters.

But at least one SEC commissioner finds fault with this reasoning: "To argue that fees are somehow related to market timing is like saying, ‘Well, in any business crime, I can go anywhere,’" said SEC Commissioner Roel Campos.

An Alliance spokesman declined comment.

__
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.