Former fund manager denies wrongdoing
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- April
- 25
The lawyer representing the former portfolio manager of Gabelli Global Growth Fund said his client “never violated any rule or regulation and always managed the mutual funds under his direction lawfully and in the best interests of shareholders.”
Lewis J. Liman, the lawyer, said Marc Gabelli will “respond forcefully in court” to a government lawsuit alleging Gabelli allowed a hedge fund to make so-called “market timing” trades of his mutual fund’s shares.
The U.S. Securities and Exchange Commission Thursday sued Gabelli, the son of famed stockpicker Mario J. Gabelli, for allegedly having a market-timing arrangement with Folkes Asset Management, which is now called Headstart Advisers Ltd.
Market timing means rapid buying and selling of mutual fund shares to take advantage in inefficiencies in the way the shares are priced. Then-state Attorney General Eliot Spitzer in 2003 uncovered numerous instances of mutual fund companies allowing such trading and launched a crackdown on the practice.
“We are not prepared to agree to a public statement that Mr. Gabelli did anything wrong,” Liman said. “He did not.”
Gabelli Funds, which is the adviser to Gabelli Global Growth Fund and a subsidiary of Rye-based Gamco Investors Inc., agreed to pay $16 million to settle separate charges related to the incident, which allegedly took place from 1999 to 2002.
Gamco, the company Mario Gabelli founded and runs, said in a regulatory filing that Gabelli Funds did not admit or deny any allegations.
This entry was posted
on Friday, April 25th, 2008 at 2:47 pm by Allan Drury.
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