While many of the heaviest allegations and admissions of improper trading have involved East-Coast based firms like Putnam Investments and Bank of America, and even Midwest firms such as Strong Capital, an admission of market-timing by San Francisco-based Fremont Investment Advisors underscores the breadth, rather than just the depth, of the mutual fund scandal.
Morningstar reports that Fremont, which manages $3.5 billion in mutual fund assets, uncovered the market timing during an internal review. The managers who partook in the unfair practices, which took place more than a year ago, have all left the company on unrelated grounds, the company said.
Fremont handles 13 mutual funds, almost all of which have sub-advisors, but would not say which funds were involved in the market-timing. Ironically, the market-timers lost money as a result of their in-and-out trading. However, as is always the case, so did long-term investors.