Nov. 14, 2003 — Schwab(Charles)Corp (SCH) said it has uncovered improper trading in mutual funds run by the company and its affiliates.
An internal investigation has identified instances of market timing and late trading, the company said today in its third quarter report to the Securities and Exchange Commission.
Schwab said the review found “circumstances in which a small number of parties were permitted to engage in short-term trading” of the Excelsior Funds run by the company’s U.S. Trust Corp. unit.
The company said it also identified “a limited number of instances at Schwab in which fund orders may have been entered or processed after” stock trading ends at 4 p.m. New York time “in a manner contrary to Schwab policies.”
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Schwab said it has previously responded to inquiries from state and federal regulators as part of the authorities’ review of mutual fund trading practices.