Anthony @ Equity Investigations, Dear Anthony, Message Board

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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony,

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To: Anthony@Pacific who started this subject	1/15/2001 9:00:54 AM
From: StockDung	of 122087

SEC probes funds for pumping 30 to 40 mutual funds examined for stock manipulation By Deborah Adamson, CBS.MarketWatch.com Last Update: 12:07 PM ET Jan 13, 2001 NewsWatch Latest headlines Get Alerted WASHINGTON (CBS.MW) -- The Securities and Exchange Commission is examining 30 to 40 mutual funds suspected of manipulating their portfolios to pump up end-of-the-quarter returns, according to an agency compliance officer. Lori Richards, SEC compliance and inspections director, told Bloomberg that the agency is investigating about three dozen funds that tend to buy small-cap or thinly traded securities and may have manipulated their returns during all or most of six consecutive quarters. An SEC task force began the probe last year. A fund is able to artificially prop up its returns by buying more shares of a stock it already owns, raising the value of the shares overall. It works when the company has a small float -- the number of shares available to the public -- or is thinly traded. Richards said all the funds being probed had at least a 3 percent increase in net asset value on the last day of the quarters in question, some even more than 4 or 5 percent. The value dropped on the first day of the next quarter. She declined to identify the funds and didn't give a timeframe for when the investigation would be concluded. -------------------------------------------------------------------------------- Deborah Adamson is a reporter for CBS.MarketWatch.com in Los Angeles.

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