SEC Fines Ark $20M For Violating Client Covenant

Law360, New York (September 30, 2010, 12:20 PM EDT) -- Ark Asset Management Co. Inc. has agreed to pay the U.S. Securities and Exchange Commission $19.8 million to settle claims that a now-deceased portfolio manager engaged in a “cherry picking” scheme that favored proprietary accounts over those held by clients.

Securities allocated to Ark's proprietary accounts at the close of trading days were profitable approximately 68 percent of the time, compared to 37 percent for client accounts, according to an administrative order filed Wednesday by the company, which is currently struggling to pay creditors in a...
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