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SEC slaps PIMCO with fraud charges

Date Class
6th May 2004 Fraud Investigation
WASHINGTON (Reuters) - The U.S. Securities and Exchange Commission said Thursday it filed civil fraud charges against PIMCO Advisors Fund Management LLC, affiliates and officers in a probe of mutual fund market timing.

The SEC said in a statement that the charges focused on improper rapid buying and selling of fund shares in arrangements with hedge fund Canary Capital Partners, which has been involved in other recent mutual fund trading probes.

The SEC said it charged PIMCO Advisors, PEA Capital LLC and PIMCO Advisors Distributors LLC, as well as Stephen Treadway, chief executive of PIMCO Advisors, and Kenneth Corba, former chief executive officer of PEA Capital.

"This action represents yet another example of a well-known mutual fund adviser placing its own interests above those of the fund shareholders through an undisclosed market timing arrangement," said SEC Enforcement Director Stephen Cutler.

The SEC said it seeks unspecified fines and restitution, an injunction against further wrongdoing, and an order barring defendants from certain positions in the mutual fund industry.

The $7.6-trillion industry has been hit in recent months with a wave of scandals involving improper market timing and illegal late trading activities in fund shares.




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