The Securities and Exchange Commission on Monday charged three former Janus Capital executives with violating federal securities laws and prospectus provisions by allowing or facilitating improper frequent trading arrangements for two brokerage firms. The three are: Warren Lammert, former portfolio manager of the Janus Mercury
Fund; Lars Soderberg, former executive vice president; and Lance Newcomb, former
sales director.
The SEC said Lammert began allowing Trautman Wasserman to begin market timing the Mercury Fund in November 2001. By the following January, the back-office team at Janus detected the activity, but Newcomb told them to look the other way. In March 2002, Soderberg, at Lammert's request, allegedly flagged additional funds that the brokerage could market time, and by September 2003, the firm had processed $2.3 billion worth of such trades. Then, in October 2002, Brean Murray began $453 million worth of market-timing trades that lasted through June 2003, the SEC said.
Newcomb last week categorically denied any and all of the charges. Lammert declined comment, and Soderberg was not reachable. A Janus spokeswoman said the case was "a legal matter between the SEC and former employees."
The SEC said it is seeking a cease-and-desist order, remedial sanctions and civil money penalties against the three. The case will be scheduled to be heard before an administrative law judge.
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