Reserve denies insider-trading charge

Reserve Management Co. Inc. denied claims of insider trading related to its Primary Fund in response to a lawsuit that Ameriprise Financial Inc. filed. Activity in the fund was frozen Sept. 16 when the money market mutual fund’s net asset value dropped below $1 dollar, sparking a run on money market mutual funds industrywide. Minneapolis-based Ameriprise and its independent-broker-dealer subsidiary Securities America Inc. of Omaha, Neb., filed the suit in federal court in Minneapolis alleging that The Reserve of New York secretly notified institutional investors of the fund’s exposure to New York-based Lehman Brothers Holdings Inc. debt. “The notion that The Reserve would secretly tip investors with material non-public information and create a ‘run’ on the Reserve Primary Fund is absurd,” the company wrote in a statement on its website. “The fund’s portfolio holdings were available to any investor who asked, including the people who have sued us … When the dust settles, we are confident that the ‘insider trading’ allegations will be dismissed.”