Although it has been three years since Janus paid $226 million to settle market-timing charges, the Securities and Exchange Commission has taken three former Janus executives, Warren Lammert, Lars Soderberg and Lance Newcomb, to trial in Denver for market timing.
Their defense's opening argument centered on the fact that market timing was openly practiced at the firm, yet other high-level executives, including former CEO Mark Whiston, are not on trial.
"I don't see Mr. Whiston in this courtroom," said Soderberg's attorney, Richard Beckler, the Rocky Mountain News reports. "Why is Mr. Whiston not here? What separates him from the others? I don't understand it."
Beckler then colorfully compared regulators' reaction to the market timing at Janus to the police inspector's response in the movie "Casablanca," when he expressed "shock there was gambling going on in this establishment."
"With fraudulent conduct, they keep the activity well hidden," Beckler said. "But this frequent trading was a topic discussed widely."
Beckler and the other attorneys also said that the prospectuses for Janus' funds allowed portfolio managers to determine whether or not timing was disruptive, and that the firm's executives honored the managers' wishes on several occasions to stop the timing when it was deemed as such.
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