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Spitzer sends subpoena to Conseco

New York Attorney General Eliot Spitzer has sent subpoenas to several insurance companies, including Conseco Inc., as part of a probe into mutual fund trading practices, the New York Post said on Friday.
/ Source: Reuters

New York Attorney General Eliot Spitzer has sent subpoenas to several insurance companies, including Conseco Inc., as part of a probe into mutual fund trading practices, the New York Post said on Friday.

According to the paper, Spitzer said in an interview he is looking at whether market timers took advantage of variable annuities to time mutual funds, but he declined to name which companies have received subpoenas.

Market timing is rapid trading that can hurt long-term mutual fund investors but falls into a grey area of the law.

The investigation of Conseco, which emerged from bankruptcy on September 10 last year, is focused on improper trading of mutual funds connected to variable annuities, the paper said, citing unnamed sources.