DENVER -- Janus Capital Group Inc. said yesterday it has finalized a $226.2 million settlement with state and federal regulators over allegations of improper market-timing trades.
Denver-based Janus will pay $100 million to investors -- $50 million in restitution and $50 million in civil penalties -- and reduce the fees it charges investors by $125 million over five years. The company will pay $1.2 million to the Colorado attorney general's office for investor education, future enforcement, and attorney's fees. It also will institute measures to guard against future problems.
The disclosure finalized an agreement tentatively reached in April between Janus and the Securities and Exchange Commission, and regulators in Colorado and New York. Janus said it consented to the agreement without admitting or denying the findings.
SEC regional director Randall Fons said, ''This closes the book with respect to Janus, the entity. Our investigation into activities at Janus is continuing." He declined to be more specific.
Janus spokeswoman Shelley Peterson declined to comment.
In May, Janus said the SEC still was looking into agreements between Janus and its brokers.
Market timing is a type of rapid, in-and-out trading that can skim profits from long-term fund shareholders. The practice is legal, but Janus policies barred it. Regulators say companies that forbid the practice but make exceptions for certain clients are guilty of fraud. The SEC said Janus allowed 12 entities to use market timing.
The largest entity, which was not identified, used market timing to make purchases of more than $2.5 billion, the SEC said.
Bank of America and FleetBoston Financial, which have since merged, agreed in March to a total $675 million settlement. And this year MFS Investment Management, of Boston, agreed to relinquish $350 million and oust two executives for improper trades.