Richard Strong Mutual Fund Scandal
Another CEO that has been recently caught to market time his mutual funds is Richard Strong. He is the founder of Strong Financial Corporation and Strong Funds and has applied market timing in order to enjoy personal gain from his own mutual funds.
Richard Strong's Experience
Richard Strong received his BA and MBA degrees from the Baldwin-Wallace College and in 1974 he established his first company, Strong Financial Corporation, in Menomonee Falls, Wisconsin. Strong's company operates with approximately $42 billion and he is listed on the Forbes 400. For the time being, Strong is the chief executive of Strong Capital Management, even though he has left the mutual fund board.
Richard Strong's Mutual Fund Misuse
As it can be seen from the short expose of Richard Strong's work experience, he has enjoyed a good professional development. Despite this, he was tempted by the possibility of greater profits and embarked on illegal actions, resulting in approximately %600,000 in net profits. He has made them on his and other peoples' behalf by engaging in short-term trading of his mutual funds. The real amount of his illegal earnings cannot be determined.
Richard Strong's Mutual Fund Timing Misuse
Richard Strong was engaged in market timing, which involves the purchase of mutual fund shares when it is forecast that the market value will increase. He traded his own mutual funds where the trades were characterized as spanning over a couple days. Strong put money on small-cap and mid-cap stocks, whose values were believed to catch up with the rest of the market. After this is accomplished, he sold the share, enjoying the big profits that were gained from such an activity.
No late trading activities a re mentioned in the reports of the investigators, which means that Strong probably hasn't engaged in trading activities after the closure of the market.
Richard Strong's Mutual Fund Investigation
The investigation of Richard Strong was incited after Attorney General Eliot Spitzer was after Canary Capital Partners for market timing their strong funds. After the disclosure of information about the trading activity of Strong, it became clear that his mutual funds purchased funds that were held for no more than a year. Additionally, blacklisting was observed due to the trades done within 30 days. As a result of the evasion of those rules, Strong's mutual funds were charged a one-percent penalty for fund purchase that has broken those rules.
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