Amvescap US Unit Execs Fined
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UK investment firm, Amvescap may be on the brink of reaching a settlement, in the alleged mutual fund scandal in the US. Three former executives of its US mutual fund unit have been fined a total of $340,000 and barred from the securities industry. Their offences related to market timing. Short-term traders had been allowed to arbitrage the mutual funds to the detriment of long term savers. Invesco, although not fined in this instance has been hit badly by the scandal. Each month for 3 years has seen a net outflow. The Amvescap group caused a stir last month , when it said that its interim dividend may have to be cut entirely if a settlement with the SEC was greater than $225m. As a precaution it merely deferred payment of the interim. Overall the mutual fund industry has paid over $2.5bn in fines, fee cuts and restitution. Two dozen are under active investigation. A consequence for Amvescap is a decline of 40% in its share price in the past year.
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