Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Monday, May 7, 2007

Zurich Capital Markets Settles Market-Timing Action

The Securities and Exchange Commission today announced a settled administrative proceeding against Zurich Capital Markets Inc. (ZCM) for its role in providing financing to hedge fund clients that engaged in market timing of mutual funds and facilitating the hedge funds' deceptive trading tactics. The Commission ordered ZCM, a New York-based subsidiary of Zurich Financial Services, to pay $16.8 million consisting of $12.8 million in disgorgement and prejudgment interest and a $4 million penalty. The money will be distributed to the mutual funds that were harmed as a result of market timing ZCM facilitated.  See SEC, Settled Administrative Proceeding Against Zurich Capital Markets Inc. for Financing of Hedge Funds' Illegal Market Timing.

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