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News November 8, 2004 Issue

Fremont Settles Market Timing Charges

On November 4, San Francisco-based mutual fund adviser Fremont Investment Advisors and its former president and CEO settled SEC charges that the firm entered into undisclosed market timing arrangements and permitted late trades to be entered. The SEC also charged the firmís former v.p. of institutional sales, who is litigating the charges.

Fremont agreed to pay $2.146 million in disgorgement and a $2 million civil penalty. The CEO agreed to pay disgorgement of $27,000 and a civil penalty of $100,000, and has consented to six month bar from the investment management industry. The settlement also resolves an investigation brought by New York attorney general Eliot Spitzer.

Since the fund scandals erupted last year, the SEC has brought more than 50 enforcement cases related to the scandals and levied approximately $900 million in disgorgements and $730 million in penalties, according to a Nov. 5 speech by Chairman William Donaldson.