A.G. Edwards settles market-timing suit

A.G. Edwards & Sons Inc. of St. Louis yesterday settled with the Securities and Exchange Commission over allegations of mutual fund market timing. The firm agreed to pay $2.4 million in disgorgement and $1.5 million in penalties. The SEC alleged that the firm allowed a group of brokers to market time funds using the firms' fee-based fund program, despite numerous complaints from fund companies about the trading activity. The agency said several brokers created multiple rep numbers by splitting accounts, thereby helping to avoid detection. The reps charged were Thomas Bridge in the Boca Raton, Fla., office and his manager James Edge, and Charles Sacco, a former rep in the Back Bay, Mass., office and that branch's manager Jeffrey Robles. Mr. Sacco was fined $272,000, but based on his financial statements will pay $15,000. Neither he nor the firm admitted to any wrongdoing. The other individuals are contesting the charges. “We are pleased to put the matter against the firm behind us,” A.G. Edwards said in a statement. The firm said it has refined its mutual fund order procedures since the market timing issue surfaced four years ago.