The board of RS Investment Trust didn't know that Edward Stern's now-defunct hedge fund Canary Capital Partners was engaging in late trading in one of its mutual funds, the co-chairman of RS Investment testified Thursday in the criminal trial of the former Bank of America broker, who allegedly facilitated the trades.

Leonard B. Auerbach, independent co-chairman of the trust, also told a prosecutor that board members would not have accepted the trades had they known when they were being placed.

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.