Federated Investors today said "a few investors" in Federated mutual funds were allowed to bypass the company's limits on frequent trading and also reported instances of late trading. The announcement followed an internal investigation into the firm's mutual fund trading. The company said it will compensate any of its investors that suffered losses as a result of the transactions and take other remedial actions as necessary. J.T. Tuskan, Federated spokesman, said the company had no immediate details on who was involved, but the internal investigation is continuing.
Federated said it is cooperating with the ongoing investigations of the SEC, the NASD and Eliot Spitzer, New York attorney general, who subpoenaed the company in September.