The U.S. Attorneys office yesterday unsealed a criminal charge complaint against Mutuals.com, charging three executives at the firm with helping hedge funds deceive mutual fund companies by hiding their market-timing activities in separate accounts, The Wall Street Journal reports. Mutuals.com said it is "vigorously" contesting the charges.
Mutuals.com Chief Executive Officer Richard Sapio, President Eric McDonald and Chief Compliance Officer Michele Leftwich appeared before the court yesterday and were released on bail payments between $100,000 and $400,000 apiece. They face up to five years in prison.
This is the first time that federal, not state, regulators have filed criminal charges in the ongoing market-timing and late-trading investigation, and notable, as well, because it concerns market timing, not in and of itself illegal, as late trading is.
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