New York Attorney General Eliot Spitzer wants records and testimony from J. & W. Seligman & Co., claiming the mutual-fund company...

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ALBANY, N.Y. — New York Attorney General Eliot Spitzer wants records and testimony from J. & W. Seligman & Co., claiming the mutual-fund company owes investors $80 million in compensation for improper market timing trades.

Spitzer says top executives approved at least a dozen secret mutual-fund timing arrangements and the company’s president approved at least one of the trades.

The legal action seeks further records “advancing an investigation of illegal trading practices at the Seligman family of mutual funds,” according to the attorney general’s office statement.

A compliance official had apparently warned management of the activities in e-mails obtained by Spitzer under subpoena.

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Market timing “is a ticking time bomb for the entire mutual-fund industry, set to go off the day the press realizes that fund companies routinely sell the returns earned by shareholders of their funds to short-term traders,” according to documents released by Spitzer.

The legal action asks the court to compel the company to release records and require public testimony. The filing names Seligman and top executives.

Seligman attorney Dan Pollock said Spitzer “filed a procedural application for documents and testimony,” most of which the company had already provided. Pollock also said management didn’t condone or participate in any market timed trades.

Market timing of mutual funds, which involves rapid in-and-out trades, is not illegal but is prohibited by many funds because it can disadvantage ordinary shareholders by diluting the value of their shares.

The action filed in state Supreme Court in Manhattan late Wednesday is a twist in Spitzer’s continuing investigation in conflicts of interests and timed trading in the mutual-fund industry.

Earlier this year Seligman voluntarily acknowledged a few cases of market timed trades. Seligman compensated investors $2 million and reduced its management fee at a cost of $4 million more.

Spitzer said records obtained under subpoena indicate the compensation to investors should be $80 million.