DENVER -- Invesco Funds Group and its sister company agreed yesterday to pay $450 million to settle allegations of improper trading, a deal that will send nearly all the money to investors harmed by the practice.
Denver-based Invesco will pay $325 million to resolve litigation alleging it permitted excessive market-timing in its funds, Colorado Attorney General Ken Salazar said. Its sister company, AIM Advisors Inc. of Houston, agreed to pay $50 million. The other $75 will come from reduced management fees.
The money will go to investors in what Salazar called one of the largest settlements yet in the market-timing scandal that has swept the $7 trillion mutual funds industry over the past year.
Amvescap, the companies' London-based parent, did not acknowledge wrongdoing. It said it has taken steps to better monitor trading and will hire an independent consultant to oversee distribution of the money to shareholders.
The agreements resolved pending investigations by attorneys general in Colorado, New York and Georgia, and the Securities and Exchange Commission. The settlement does not include former Invesco CEO Raymond Cunningham, who has been charged with fraud by the SEC for allegedly allowing certain customers to market-time Invesco funds.
Regulators had accused the company of a scheme that defrauded shareholders by seeking out wealthy investors for market-timing arrangements, quick in-and-out trading that is legal but prohibited by many funds because it can skim profits from longer-term shareholders.