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Spitzer fires back at SeligmanPosted by Retirement on: 2005-09-30 07:31:54 in category:
Stocks & Securities [ Print | Permalink / 0 Comment(s) ] New York top cop widens fund investigation after lawsuit By John Spence, MarketWatch Last Update: 4:11 PM ET Sept. 29, 2005 BOSTON (MarketWatch) -- The ongoing fracas between New York Attorney General Eliot Spitzer and J. & W. Seligman & Co. entered a new round Thursday when Spitzer said his office has disclosed new evidence against the asset manager in a market-timing investigation. In a court filing in New York, Spitzer asked the court to order Seligman to hand over information and documents related to trading activity at the firm's mutual funds. "The evidence set forth in today's filing shows an extensive market-timing program that appears to have been authorized by top executives," Spitzer said in a statement Thursday. "While the company has acknowledged allowing some improper market timing, the full extent of the problem at Seligman has not been disclosed to investors," he added. Spitzer's action comes after Seligman filed a complaint earlier this month against Spitzer, alleging that he doesn't have jurisdiction to investigate the fees the company charges mutual-fund investors. See earlier story. Seligman charged that Spitzer was issuing subpoenas in the market-timing probe as part of a "pressure tactic" to get the firm to cave in on fee reductions sought by the attorney general. Additionally, Seligman argued that only Congress and the Securities and Exchange Commission have the jurisdiction to regulate mutual-fund fees. The suit raised eyebrows because Seligman was the first fund company to fight a Spitzer market-timing investigation in court. Other fund shops had reached civil settlements with Spitzer's office, with some agreeing to knock down fees in addition to fines and penalties. In the Seligman complaint, the company said Spitzer threatened to widen the market-timing investigation when Seligman balked on lowering allegedly excessive fees. In previous market-timing cases, fund firms had improperly allowed hedge funds and other large clients to trade mutual-fund shares rapidly, which can drive up costs and taxes for long-term fund shareholders. A spokesman for Spitzer's office, Marc Violette, declined to respond to questions about Seligman's accusation of pressure tactics, although he said that the market-timing arrangements at Seligman violated limitations outlined in the company's prospectuses. Daniel Pollack, an attorney representing Seligman, said Spitzer's latest action was a procedural application for more information, not a lawsuit. "Spitzer has threatened to sue Seligman, but he has not done so," Pollack said. "If he does, we'll respond on the merits in court." In early 2004, Seligman said that it discovered previous market-timing arrangements and that the firm terminated them; Seligman also said it was cooperating with Spitzer and the SEC in their investigations. Restitution was made to investors in the affected funds, according to the firm. However, it now appears that the battle between the New York attorney general and Seligman was precipitated by Spitzer's efforts to get the asset manager to reduce fees his office viewed as excessive. Homepage Other open community sites http://www.business-business.biz Please support our sponsors: To design your custom retirement plan. http://www.retirement-plan.us For planning IRA rollovers. http://www.ira-rollover.us Professional asset allocation and the wonders it can do. http://www.asset-allocation.us Professional money management- Nationally ranked performance. http://www.roth-ira.us Managers selected to fit your needs. http://www.money-managers.us |
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