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March 14, 2005 at 07:00 PM
A Hartford insurer says federal regulators are asking for information about whether market timing might have affected its customers.[@@]
The company, Phoenix Companies Inc., says in the legal proceedings section in a 10-K annual report filed with the U.S. Securities and Exchange Commission that the Boston office of the SEC has issued Phoenix a “deficient letter.”
The letter focuses on perceived weaknesses in procedures for monitoring trading to prevent market-timing activity, Phoenix says.
“Market timing” can have several meanings. In recent months, SEC investigators have been using the term to refer to the practice of speculators engaging in rapid trades to take advantage of inefficiencies in the spread of share price data and other important information.
The SEC staff has “requested the company to conduct an analysis as to whether shareholders, policyholders and contract holders who invested in the funds that may have been affected by undetected market timing activity had suffered harm and to advise the staff whether the company believes reimbursement is necessary or appropriate under the circumstances,” Phoenix says in its 10-K filing.
