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 Spitzers 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.