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Civil fraud charges have also been brought against two executives for their role in the undisclosed market-timing arrangement. They are Stephen Treadway, chief executive officer of PIMCO Advisors Fund Management and PIMCO Advisors Distributors as well as chairman of the board of trustees of PIMCO Funds, and Kenneth Corba.
"Our action seeks to hold accountable all those responsible for this betrayal of trust including, most significantly, PIMCOs senior management," said Stephen Cutler, director of the SECs division of enforcement. Randall Lee, director of the SECs Pacific regional office in Los Angeles, added, "Quid pro quo deals like this have no place in the mutual fund business."
The news comes after PIMCOs star bond fund manager vehemently denied allegations made by New Jersey regulators saying the firm had arrangements pertaining to sticky assets, late trading or stale pricing arbitrage, and improper dissemination of fund holdings. The SEC is seeking injunctive relief, disgorgement, fines and a ban preventing the defendants from serving as fiduciaries of any registered investment company.