DENVER—Three former Janus Capital Management LLC executives accused of improperly allowing market-timing trades in its mutual funds will be allowed to continue working in the industry under a judge’s ruling.
Administrative Law Judge Carol Fox Foelak handed down cease-and-desist orders Monday against Warren Lammert and Lars Soderberg and dismissed charges against Lance Newcomb.
She told Lammert and Soderberg not to violate Securities and Exchange Commission laws in the future.
“There is harm to the marketplace when, through secret agreements, one class of investors is given an opportunity that it believes will allow it to make profits at the expense of the remaining, unknowing investors,” she stated.
The three were accused in July 2006 of allowing some customers to participate in market timing, a type of rapid, in-and-out trading that can skim profits from long-term fund shareholders. The practice is legal, but Janus policies at the time discouraged it.
The charges came about two years after Denver-based Janus Capital Group Inc. finalized a $226.2 million settlement with state and federal regulators over market-timing allegations, which were part of a scandal that swept the $7 trillion mutual funds industry.
Janus consented to the agreement without admitting or denying the findings.
Lammert managed Janus’ Mercury Fund until late February 2003, and Soderberg was an executive vice president of institutional services from 2002 until he resigned in July 2004. Newcomb was an assistant vice president and regional sales director for Janus, resigning in August 2003.
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