Deutsche Asset Management finalized settlements with the SEC and New York Attorney General's Office — totaling $139 million — over allegedly improper mutual fund market-timing practices. DeAM agreed to pay the attorney general's office $102 million in "disgorgement and/or restitution" and a $20 million civil penalty, according to a statement from the firm. DeAM also agreed to settle with the SEC for an additional $17 million on the same matter. According to the SEC's claim against Deutsche Asset, from late 1997 through March 2003 the company allowed some investors to "engage in short-term or excessive trading in a manner inconsistent with the respective mutual fund prospectus disclosures, and also failed to disclose these market-timing arrangements to the funds' trustees." DeAM agreed to both settlements without admitting or denying any wrongdoing.
Separately, DeAM continues to discuss a settlement with the Illinois Secretary of State's office over alleged market-timing practices, confirmed spokeswoman Mayura Hooper. Company officials expect to settle the charges for roughly $4 million in investor education contributions, plus a $2 million contribution to the state's Securities Audit and Enforcement Fund, according to a news release from DeAM.