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Alliance Capital may have illegally taken million of dollars from investors in the AllianceBernstein family of funds by engaging in a scheme of after hours market timing.
Investigation Source
- Nationwide
Investigation Scope
Category Information
Investigation Topics
- Over Charge
- Excessive or Unauthorized Fees
- Investments
- Undisclosed Fees By Investment Advisors
Product or Service
- Mutual Funds
Injury Type
- Monetary Loss
Investigation Details
Investigation and pending class action against Alliance Capital. Alliance Capital owns and operates the AllianceBernstein family of funds. This class action lawsuit alleges that Alliance Capita engaged in a pattern and system of "market timing" and/or "late trading" in connection with Alliance Capital's operation of the AllianceBernstein funds.
In the United States, mutual fund prices are set once daily at 4:00 p.m. Eastern time. Late trading occurs when traders are allowed to purchase fund shares after 4:00 p.m. at that day's closing price. Under law, most mutual fund trades received after 4:00 p.m. must be executed at the following day's closing price, but because some orders placed before 4:00 p.m. cannot be executed until after 4:00 p.m., brokers can collude with investors and submit post-4:00 p.m. trades as if they had been placed before 4:00 p.m. Such trades can be made with information about after-hours market developments.
Market timing is an investment strategy in which an investor tries to profit from short-term market cycles by trading into and out of market sectors as they heat up and cool off. In many cases, funds bar or limit market timing because the practice may increase the cost of administering a mutual fund borne by all shareholders in the fund. Market Timing and Late Trading cost the investors in the Bank One funds hundreds of millions of dollars.
In the United States, mutual fund prices are set once daily at 4:00 p.m. Eastern time. Late trading occurs when traders are allowed to purchase fund shares after 4:00 p.m. at that day's closing price. Under law, most mutual fund trades received after 4:00 p.m. must be executed at the following day's closing price, but because some orders placed before 4:00 p.m. cannot be executed until after 4:00 p.m., brokers can collude with investors and submit post-4:00 p.m. trades as if they had been placed before 4:00 p.m. Such trades can be made with information about after-hours market developments.
Market timing is an investment strategy in which an investor tries to profit from short-term market cycles by trading into and out of market sectors as they heat up and cool off. In many cases, funds bar or limit market timing because the practice may increase the cost of administering a mutual fund borne by all shareholders in the fund. Market Timing and Late Trading cost the investors in the Bank One funds hundreds of millions of dollars.
Defendant Details
| Name (Stock Symbol) | Brief Description |
|---|---|
| Alliance Capital Management Holdings | Alliance Capital Management Holdings has changed its name to AllianceBernstein Holdings L.P. AllianceBernstein is a investment management firm with $395 billion dollars under management. AXA Financial owns a majority interest in AllianceBernstein. AXA Financial is a wholly owned subsidiary of AXA, one of the largest global financial services organizations. |
| AllianceBernstein | AllianceBernstein is a investment management firm with $395 billion dollars under management. AXA Financial owns a majority interest in AllianceBernstein. AXA Financial is a wholly owned subsidiary of AXA, one of the largest global financial services organizations. |