SEC accuses three ex-Janus executives of allowing market-timing trades
DENVER (AP) — The Securities and Exchange Commission has accused three former executives of Janus Capital Management of improperly allowing market-timing trades in the company's mutual funds.
SEC documents released Monday said the agency is seeking unspecified fines and sanctions against Warren Lammert, Lars Soderberg and Lance Newcomb for allegedly allowing rapid trading in Janus funds despite company rules that discouraged it. All three have left the company.
Lammert, who managed Janus' Mercury Fund, declined comment Tuesday through a co-worker at Granite Point Capital Management, where he now works. The co-worker declined to give her name.
Newcomb, who was an assistant vice president and regional sales director at Janus, told the Rocky Mountain News he did nothing wrong. Soderberg, who was an executive vice president and managing director in sales, had no listed phone number.
Janus spokeswoman Shelley Peterson said the allegations were between the SEC and the three men and that the company was not involved.
Janus reached a $226.2 million settlement with state and federal regulators in 2004 after the SEC alleged the company allowed 12 entities to use marketing-timing practices. Janus acknowledged 10 market-timing arrangements, all of which have ended. In the settlement, Janus did not formally admit or deny the SEC findings.
In the new allegations, the SEC said that Lammert agreed in November 2001 to allow customers of the Trautman Wasserman & Co. brokerage firm to do market-timing trades in Janus' Mercury Fund.
Janus' operations group spotted the activity and asked for it to be halted in January 2002, the SEC said. Newcomb told the operations group to stop monitoring Trautman customers' trades, the agency alleged.
In March 2002, Soderberg began communicating with Trautman about other Janus funds its customers could use, the SEC said. The agency said Soderberg acted at Lammert's request.
The SEC claimed Trautman customers' transactions in Janus funds totaled $2.6 billion between November 2001 and September 2003. Trautman officials did not immediately return a call Tuesday seeking comment.
The SEC alleged Lammert agreed in September 2002 to allow a customer of the Brean Murray & Co. brokerage firm to exceed the Mercury Fund's trading limits. The SEC said the Brean customer's trades totaled $453 million between October 2002 and June 2003.
Officials of Brean Murray, now Brean Murray Carret & Co., did not immediately return a call.
Lammert, 44, left Janus in March 2003. Soderberg, 47, left in July 2004 and Newcomb, 38, left in August 2003.
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