Securities and Exchange Commission Chairman William Donaldson testified before the Senate Banking Commitee Tuesday that the commission is studying possible rules to thwart market timing and late trading, the issues at the epicenter of the New York State Attorney General’s investigation, Reuters reports.

"Our staff is studying whether we need measures to prevent the circumvention of forward pricing requirements for fund shares and market-timing restrictions," Donaldson said. This includes a vigorous "action plan" that involves working closely with the New York Attorney General and other state prosecutors.

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