Admitting conflicts of interest regarding mutual fund trades, Alliance Capital said Tuesday that it had suspended both a hedge fund executive and portfolio manager.
The industry giant also admitted that New York Attorney General Eliot Spitzer has contacted it as part of his investigation into market timing and late trading.
Alliance Capital, with an estimated $430 billion in assets, said in a statement that based on the preliminary results of its own ongoing internal investigation concerning mutual fund transactions, it has identified conflicts of interest in connection with certain market-timing transactions.
The suspended portfolio manager had overseen the AllianceBernstein Technology Fund, while the executive sold company hedge fund products. The companys board of directors has formed a special committee comprised of members of the audit committee and independent directors to look into the matter.