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Federated Agrees to Settle Fund Trading Abuse Probe

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Federated Investors (FII) said it entered into settlement agreements with the Securities and Exchange Commission and the New York State Attorney General (NYAG) to resolve the company’s past mutual fund trading issues.

Under terms of the deal, Federated agreed to pay a total of $72 million for the benefit of fund shareholders, of which $45 million is a civil penalty.

In addition, Federated agreed to reduce the investment advisory fees on certain Federated funds by $4 million per year over the next five years, based on effective fee rates and assets under management as of Sept. 30, 2005. The specific fund fee reductions will be determined by Federated in consultation with the Independent Trustees of the Federated Funds and will be reviewed with the NYAG.

As previously reported in early 2004, Federated paid approximately $8.0 million to certain funds as determined by an independent consultant.

Contact Bob Keane with questions or comments at: [email protected].


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