Money Management Executive

Federated Admits Improper Trading

Published October 23, 2003, 1:00 a.m. EDT

1 Min Read

As it admitted Wednesday that an internal investigation had found improper trading within the company both market timing and late trading Federated Investors further disclosed that it has been subpoenaed by New York Attorney General Eliot Spitzer as part of his mutual fund probe, Reuters reports.

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"It appears that a few investors in Federated funds were granted exceptions to the companys internal procedures for limited frequent transactions, and that some of these investors made additional investments in other Federated funds," said the company in a statement.

Besides Spitzers subpoena, a request from the Securities and Exchange Commission for information has also been received by Pittsburgh-based Federated, which holds about $194 billion in assets.

Federated said that although its internal investigation headed up by the law firm Reed Smith LLP did turn up some evidence of late trading, it was too soon to tell just how much improper trading took place.

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Money Management Executive

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