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Nicholas-Applegate Settles SEC Charges

CALIFORNIA / News and Insight on Business in the Golden
State | THE STATE / SECURITIES

August 13, 1998|Bloomberg News

Nicholas-Applegate Capital Management agreed to pay a $250,000 fine to settle charges that it failed to supervise a trader who allegedly made $929,601 in illegal profit at the expense of client accounts. The Securities and Exchange Commission alleged that the San Diego-based investment firm did not reasonably supervise Timothy J. Lyons when he was a trader and portfolio manager at the firm from 1991 to 1993. In a separate action, the commission charged Lyons with allocating profitable "day" trades into his personal account and allocating unprofitable trades to his clients' accounts. Day trades involve buying and selling the same security within the same day or within a few days. The SEC is seeking unspecified fines and restitution of $929,601 from Lyons. Lyons breached his fiduciary duty to clients by not disclosing his conflict of interest in favoring his own accounts over client accounts, the SEC said.

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