Massachusetts regulators issued subpoenas Thursday to employees of Fidelity Investments, Morgan Stanley and Franklin Resources, extending their market-timing probe at Prudential Securities, Reuters reports. Spokespeople for the three firms that have just now come under the inspection of Mass. Secretary of the Commonwealth William Galvin confirmed that they have received these requests for information.
- In September, Galvins office began looking into whether employees of Prudentials Boston office engage in market timing. While the practice is legal, most fund prospectuses state that they do not allow it. Research shows that market timers can drag the returns of other, long-term shareholders by as much as 2% a year.
Prudential recently forced two managers from offices in New York and Garden City, N.Y., to resign.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.