State regulators have launched an investigation into mutual fund trading practices at Fred Alger Management after the company’s former vice chairman was sentenced to prison for three years for tampering with evidence.

In a filing with the Securities and Exchange Commission, the New York-based fund manager said regulators in New York, Massachusetts and West Virginia have requested information regarding market timing and late trading in its funds.

Back in December, James Connelly, Alger’s erstwhile vice chairman, was convicted of obstructing New York Attorney General Eliot Spitzer’s probe by instructing employees to get rid of potentially incriminating evidence.

Alger said in the filing that it is prepared to make appropriate restitution if it the probe reveals that improper trading lowered investor returns.

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