Strong Capital Management, its transfer agent and broker/dealer, along with founder Richard Strong and two executives, agreed to pay more than $175 million to settle with the SEC and the attorneys general of New York and Wisconsin Wednesday for market-timing abuses. As part of the deal, Strong and the two executives are permanently barred from the fund industry.
The SEC found that while Strong Capital told investors they could be barred from the companys funds for market timing, it allowed Canary Capital to market time Strong funds through 135 round-trip trades resulting in $2.7 million in gross profits. Strong himself market timed a number of his firms funds, including one he managed, between 1998 and 2003, resulting in $4.1 million in gross profits and $1.6 million in net profits. Strong reportedly made more than 1,400 redemptions over a period of six years.