Massachusetts regulators yesterday filed a complaint against A. G. Edwards & Sons, accusing the firm of defrauding mutual-fund shareholders...
BOSTON — Massachusetts regulators yesterday filed a complaint against A.G. Edwards & Sons, accusing the firm of defrauding mutual-fund shareholders by allowing market-timed trades by a now-suspended Boston broker that involved billions of dollars.
The administrative complaint by Massachusetts Secretary of State William Galvin claims the financial-services firm’s brokerage subsidiary directed its representatives to obtain an indemnity agreement from favored clients who then were allowed to trade in and out of mutual funds “to the disadvantage of other shareholders.”
“They knew it was wrong and they sought to avoid the consequences,” Galvin said in a news release.
Most Read Stories
- Wave goodbye: Live Seafair hydroplane-race TV coverage sputters out after 66 years VIEW
- Alex Tizon, former Seattle Times reporter who won Pulitzer Prize, dies at 57
- Judge: Married Lake Stevens cop’s misconduct didn’t violate girlfriend’s civil rights
- Cameron Dollar rejoins Washington on Mike Hopkins' staff
- Sports on TV & radio: Local listings for Seattle games and events
Market timing is the use of quick, in-and-out trades that skim profits from long-term shareholders and benefit favored short-term investors.
The secretary of state, Massachusetts’ regulator of the financial industry, is seeking “fair compensation” for any losses incurred by mutual-fund shareholders, as well as an unspecified administrative fine.
“We plan to defend ourselves vigorously,” said Margaret Welch, a spokeswoman for St. Louis-based A.G. Edwards.