Alliance Capital Management reached a joint settlement with New York Attorney General Eliot Spitzer and the SEC today over accusations of mutual fund market timing. The agreement, valued at $600 million by Mr. Spitzer, includes a $250 million fine to compensate fund shareholders and a 20% weighted average reduction in fees on Alliance Capital's U.S. long-term open-end retail funds, beginning Jan. 1 and lasting for at least five years. The SEC settlement did not include the fee reduction. Alliance Capital neither admitted nor denied wrongdoing.
The company also agreed to establish an internal compliance control committee and hire an independent compliance consultant. Additionally, Alliance Capital will undergo a compliance review every other year, beginning in 2005, by an independent third party.