Kenneth Corba, the former chief executive officer of PEA Capital, agreed Monday to pay $200,000 to settle with the Securities and Exchange Commission for allowing hedge fund Canary Capital Partners to market time $4 billion worth of trades in Pimco funds.

PEA Capital, an affiliate of Pacific Investment Management Co., is the investment advisor to Pimco's equity funds.

"The defendant negotiated a secret agreement that permitted a single favored investor to engage in a trading strategy that was denied to ordinary investors," said Randall Lee, regional director of the SEC's Pacific Regional Office.

Corba neither admitted nor denied the allegations but agreed not to work for an investment advisor for a year.


Stephen J. Treadway, who was the head of Pimco Advisors Distributors, faces his civil trial in U.S. District Court in Manhattan, which is scheduled to begin on Monday. Treadway has denied the allegations that he failed to heed Corba's warnings that allowing Canary Capital to market time the company's funds went against their prospectus rules.

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.