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August 05, 2004 at 08:00 PM
Aug. 3, 2004 — Evergreen Investment Management Co. said the Securities and Exchange Commission is considering possible enforcement action against the company over improper trading in its mutual funds.
Wachovia Corp (WB), Evergreen’s parent, said it and certain current and former executives also face possible enforcement action by the SEC in connection with stock trades and disclosure issues related to Wachovia’s 2001 merger with First Union. The disclosures by Wachovia and Evergreen were made in regulatory filings on Tuesday.
Evergreen said it was notified of the potential action on July 28. Regulators allege that under an arrangement involving a former Evergreen employee, a broker, on behalf of a client, made trades in a fund that exceeded limitations mandated in the fund’s prospectus, Evergreen said.
The allegations also involve share purchases and sales between September, 2001, and January, 2003, by a former Evergreen portfolio manager in the fund he managed at the time, Evergreen said.
Evergreen and Wachovia said they plan to tell the SEC that it should not initiate the enforcement actions. Wachovia said it believes the stock trades and disclosures related to the First Union merger “complied with applicable law.”
