WEST PALM BEACH, FL (HEDGECO.NET) – The Boston based money manager, Wellington Management Co, is facing the US Securities and Exchange Commission inquiry, into its methods of allocation of stocks tohedge funds. The inquiry is to examine if Wellington authorities gave favorable treatment to its hedge funds, over other funds. Hedge funds are more profitable to run than other kinds of funds; suchan investigation will focus on allocation sources.
This case may test the conflict of interest allegation, which has been leveled in cases where mutual fund companies also manage hedge funds. Earlier in the year, SEC authorities proposed a new law that will force such fund establishments running mutual funds and hedge funds to disclose such cases.
According to published reports, Wellington oversees about 250 mutual funds for 95 companies, and has allocated about 65% of its managed assets to stocks at the end of March, 2004.
A Wellington spokeswoman, Lisa Finkel said, �The SEC is looking into some of our trading practices and procedures.� However, she said, such investigation is not focused �on short-term or after-hours trading of mutual fund shares.� Authorities of the Securities and Exchange Commission in Washington D.C declined to comment on such allegations.
Wellington Management Company oversees about US $120 billion for Vanguard, according to published reports. Vanguard authorities said they have a long-standing relationship with Wellington Management Company, and remain confident in Wellington�s ability to continue to advise their clients.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
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