New Jersey regulators sued four entities related to PIMCO mutual funds, saying they defrauded investors by allowing a hedge fund at the center of a trading scandal to improperly trade in their funds.
New Jersey Attorney General Peter C. Harvey and Franklin L. Widmann, chief of the New Jersey Bureau of Securities, said Allianz Dresdner Asset Management of America LP, the parent of the PIMCO mutual fund group, allowed hedge fund Canary Capital Partners LLC to improperly trade in PIMCO funds.
The PIMCO entities agreed to the trading in exchange for large static investments in certain funds, or so-called "sticky assets," which generated substantial fees and other income for the defendants, the New Jersey officials said in a statement.
Federal regulators said last week they may bring an enforcement action against two PIMCO entities. The PIMCO mutual fund group is owned by German insurer Allianz AG.
