BISYS to pay up $21m mutual fund fine

29 September 2006

BISYS Fund Services, a subsidiary of BISYS Group is to pay more than $21 million in fines over charges of defrauding fund investors, it has been announced.

According to the Securities and Exchange Commission (SEC), the company improperly helped mutual fund advisers defraud investors by using fund assets to subsidize marketing expenses, rather than paying those costs out of their own pockets.

BISYS has agreed to pay the fine, but as not admitted any wrongdoing in the activities, which were alleged to have taken place between 1999 and 2004.

Commenting on the settlement, Fred Naddaff, president of BISYS Fund Services, said that the company now wanted to move forward.

"We have implemented industry-leading best practices to ensure compliance with the highest legal and ethical standards," he said.

SEC officials meanwhile reaffirmed their commitment to clamping down on mutual fund administrators transferring money from accounts in order to top-up marketing funds.

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