Federated Investors on Thursday reported a $51 million charge it took in connection with settlement with regulators over allegations of illegal trading.
The charge reduced the company's first-quarter earnings to 7 cents a share, down from 46 cents a share, a year earlier. Excluding the charge, Federated's earnings would have been 45 cents a share, a penny better than analysts' estimate.
In 2003, the company acknowledged that a few employees had improperly accepted more than 100 illegal trades after the 4 p.m. market close. The company also said two officers helped Canary Capital LLC to rapidly trade in and out of Federated's domestic funds 46 times over a five-month period, a practice commonly known as market timing.