With all the news of the real estate bubble trouble dominating financial headlines, mutual fund investors may have forgotten perhaps the greatest systematic fraud perpetrated on fund shareholders - namely, the great mutual fund skimming scandal (known aliases: fund late trading, fund timing).
Fear not, dear fund investor, the money police (SEC or Securities And Exchange Commission) is still hot on the trail of fund cattle rustlers. Today's Chicago Sun Times reports on the latest and greatest:
Ritchie Capital Management, founder Thane Ritchie, an employee and the Ritchie Multi-Strategy Global Trading Ltd. hedge fund are paying a total of $40 million to settle charges of illegal late trading.
The settlement is one of the largest the SEC has secured since it started an industrywide crackdown in 2003 against alleged mutual-fund trading abuses.
The SEC said that from January 2001 through September 2003, Ritchie Capital placed thousands of late trades in mutual fund shares and used news and information breaking after the market closed to make its trading decisions while receiving the same day’s value for the funds traded.
Late trading involves favored customers receiving the market-closing price for mutual fund shares for orders placed after the stock market closes for the day at 4 p.m. EST."
Ritchie (a little less) Rich
With all the news of the real estate bubble trouble dominating financial headlines, mutual fund investors may have forgotten perhaps the greatest systematic fraud perpetrated on fund shareholders - namely, the great mutual fund skimming scandal (known aliases: fund late trading, fund timing).
Fear not, dear fund investor, the money police (SEC or Securities And Exchange Commission) is still hot on the trail of fund cattle rustlers. Today's Chicago Sun Times reports on the latest and greatest:
Ritchie Capital Management, founder Thane Ritchie, an employee and the Ritchie Multi-Strategy Global Trading Ltd. hedge fund are paying a total of $40 million to settle charges of illegal late trading.
The settlement is one of the largest the SEC has secured since it started an industrywide crackdown in 2003 against alleged mutual-fund trading abuses.
The SEC said that from January 2001 through September 2003, Ritchie Capital placed thousands of late trades in mutual fund shares and used news and information breaking after the market closed to make its trading decisions while receiving the same day’s value for the funds traded.
Late trading involves favored customers receiving the market-closing price for mutual fund shares for orders placed after the stock market closes for the day at 4 p.m. EST."
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