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October 08, 2004 at 08:00 PM
Oct. 6, 2005 — RS Investment Management LP will pay $25 million to settle Securities and Exchange Commission charges that the company permitted rapid-fire trading in its mutual funds, federal and New York regulators said today.
Under a separate agreement with New York Attorney General Eliot Spitzer, RS also agreed to reduce fees it charges fund shareholders by $5 million over five years.
The company will return $11.5 million and will pay $13.5 million in fines as part of the SEC settlement. The money will be distributed to fund investors who were affected by the market-timing trades, the SEC said. RS also will take steps to strengthen compliance, authorities said.
As part of the SEC settlement, RS’ chief executive officer, G. Randall Hecht, and its former chief financial officer, Steven Cohen, agreed to pay fines of $150,000 each. RS and the two men neither admitted to or denied the SEC’s fraud charges.
Cohen also will be suspended from associating with an investment adviser or investment company for nine months. That will be followed by a two-year suspension from serving as an officer or director of an adviser or investment company.
