Waddell & Reed reached an agreement with the Securities and Exchange Commission, New York Attorney General Eliot Spitzer and Kansas Securities Commissioner Chris Biggs over market timing in its mutual funds between 1995 and 2003, agreeing to pay $50 million in restitution to investors and to reduce fees by $5 million a year for five years.

In addition, the company will pay Kansas $2 million for investor education. The company has also agreed to increase efforts to halt market timing, ensure fees charged to investors are negotiated at arm's length, establish an independent board of directors and improve disclosure of fees and expenses to investors.

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