Millennium Settles With Spitzer, SEC for $180 Million

December 1, 2005
Bloomberg
By Christopher Mumma & Katherin Burton

Millennium Partners LP, a $5 billion hedge fund company accused of improper mutual fund trading, agreed to pay $180 million in a settlement with New York Attorney General Eliot Spitzer and the U.S. Securities and Exchange Commission.

Millennium, run by Israel Englander, defrauded fund companies from 2000 to 2003 by rapidly buying and selling mutual fund shares, a practice known as market timing, which drove up costs for long-term investors, Spitzer and the SEC alleged. The New York-based firm set up more than a thousand accounts to hide its identity as it made more than $52 billion in trades, Spitzer said today in a statement.

The sanctions are the biggest against a hedge fund in the two-year investigation of improper mutual fund trading that regulators say hurt other investors. Millennium is one of more than 30 companies that have paid a total of about $3.7 billion since Spitzer got a tip in 2003 about Canary Capital Partners LLC, a now-defunct hedge fund. The SEC later started its own probe of the $8.6 trillion mutual fund business...

Labels: Eliot Spitzer, New York AG