The State of New York and the US Securities and Exchange Commission (SEC) have filed civil charges against the Invesco Fund Group and its chief executive, Raymond Cunningham, alleging that the firm allowed certain investors to engage in market timing practices, in contravention of its stated policy on this issue, and to the detriment of other investors.
The case against Invesco is being watched closely by the industry as it is the first in the ongoing probe into the US mutual fund industry to be based solely on market timing, which is not illegal, but occupies a grey area in investment law.
The allegations have also attracted the attention of the media due to the number of 'special arrangements' established by Invesco executives with favoured investors - as many as sixty, according to estimates.
"This is a company whose actions injured their shareholders, and we are consequently seeking appropriate remedies to protect the shareholders," New York attorney general, Eliot Spitzer said in a recent interview.
According to Reuters, Invesco's UK-based parent, Amvescap has announced that it will "vigorously" contest the charges, arguing that Invesco has not broken any law.
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