SEC Launches New Probe of Managers' Personal Assets

The Securities and Exchange Commission has launched an aggressive new investigation sifting through the personal fortunes of mutual fund managers for improper investments, The Boston Herald reports.
This latest sweep potentially reflects an effort by SEC Chairman William Donaldson to crack down on financial misconduct and avoid another embarrassing episode of being upstaged by New York Attorney General Eliot Spitzer.
In its latest sweep for improprieties in the mutual fund industry, the SEC is asking for personal investment records belonging to senior management to determine whether insider activities benefiting external investors have harmed shareholders.
According to The Herald, large mutual fund providers headquartered around Boston's downtown hub were contacted by regulators involved in this investigation. Investigators are reportedly looking for documents revealing that senior fund management officials participated in "short-term purchases, sales and exchanges of shares" amounting to improper market-timing activities that potentially undermined long-term investors.
Examiners are also reportedly searching for evidence of front running conducted by fund managers who personally bought stock before making a large trade in an institutional portfolio.

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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.

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