Now, mutual funds don't have to feel quite so lonely. The Securities and Exchange Commission and New York Attorney General Eliot Spitzer have settled their first market-timing case against variable annuity issuers, with fines and disgorgement totaling $20 million.
A blend of insurance and securities, variable annuities fall under the regulatory scrutiny of the SEC, and the agency has now charged subsidiaries of Conseco of Carmel, Ind., and Inviva of New York, with securities fraud for inadequate disclosure of market-timing activity in their variable annuities. Both companies neither admitted to nor denied the allegations of the settlement. The charges revolve around activity involving $120 million in market-timing assets in approximately 100 contracts from late 1999 through September 2003.