Dreyfus puts Schonberg on leave, continues inquiry
Reuters, Wednesday, July 08, 1998 at 14:08
NEW YORK, July 8 (Reuters) - Dreyfus Corp. said Wednesday
that it placed portfolio manager Michael Schonberg on paid
administrative leave in connection with an in-house inquiry
into allegations that Schonberg managed two mutual funds in
ways that benefited his personal investments.
"Over the past few weeks, allegations have been made with
regard to certain activities involving securities held in two
different Dreyfus funds," Dreyfus spokeswoman Patrice Kozlowski
said in an interview.
"As a result, and to ensure the integrity of Dreyfus, we
have been conducting a thorough review of such activities," she
said. "The review has not yet been completed."
Schonberg's management of the two funds received widespread
attention in June when Manuel Asensio, a high-profile
short-seller, alleged in a press release that Schonberg used
the funds' money to benefit a personal investment in Chromatics
Color Sciences International Inc. (NASDAQ:CCSI).
Dreyfus, a unit of Mellon Bank Corp. (NYSE:MEL), said in a
news release earlier Wednesday that Schonberg was placed on
paid leave "to facilitate the (inquiry) process and to assure
that Mr. Schonberg's time will continue to be devoted
exclusively to this inquiry."
Schonberg could not be reached for comment on Wednesday.
Kozlowski cited company policy in declining to comment on a
recent Wall Street Journal report that the U.S. Securities and
Exchange Commission also is looking into the situation.
An SEC spokesman declined to comment.
On April 13, Dreyfus replaced Schonberg as primary
portfolio manager for its Dreyfus Aggressive Growth and Premier
Aggressive Growth funds, naming Paul LaRocco to that position.
But Schonberg was to remain active in the funds' management,
Dreyfus said at the time.
The Aggressive Growth Fund lost 18 percent in the second
quarter and is down 20.1 percent for the first half of the
year.
Premier Aggressive Growth lost 14.9 percent in the second
quarter and was off 14.8 percent for the six-month period.
Chromatics was up 9/32 at 5-7/16 in afternoon trading.
Copyright 1998, Reuters News Service |
