NU Online News Service, Dec. 23, 2003, 12:54 p.m. EST – Principal Financial Group Inc., Des Moines, Iowa, says a voluntary review of its mutual fund operations detected some signs that former employees might have engaged in market timing with personal accounts.[@@]

In a report filed with the U.S. Securities and Exchange Commission, Principal says the voluntary review found that former employees who might have engaged in market timing include 2 portfolio managers. The vast majority of the activity detected took place between 1998 and 2000, and no market timing activity by portfolio managers has occurred since 2000, the company says.

Principal adds that it believes employees made $4,600 in investment gains related to mutual funds and $175,000 in gains related to 401(k) separate accounts. Restitution will be made to all affected funds, the company says.

The voluntary review did not reveal any signs of practices such as late trading, Principal says.

Late trading gives some investors a chance to use market information not available to other investors.