A.G. Edwards Settles With SEC

Updated from 3:34 p.m. EDT

A.G. Edwards(AGE) will pay nearly $4 million for a role in the mutual fund market-timing trading scandal.

The Securities and Exchange Commission on Wednesday accused the St. Louis-based brokerage of failing to supervise several brokers who allegedly engaged in illegal market-timing activities.

According to the SEC, A.G. Edwards "failed reasonably to supervise some of its registered representatives who used deceptive means to place market timing trades on behalf of their customers."

The firm agreed to pay $3.86 million to settle the claims, consisting of $2.36 million for "disgorgement and prejudgment interest" and another $1.5 million in civil penalties. A.G. Edwards consented to the settlement without admitting or denying the findings.

"We are pleased to put the matter against the firm behind us," AG Edwards said in a statement. "In the fall of 2003 we, like many firms within the securities industry, refined our policies and procedures relating to the receipt and supervision of mutual fund orders after a careful and thorough review."

A.G. Edwards has also agreed to hire an independent consultant to assess whether it has set up procedures to detect future market-timing trades.

In 2005, Massachusetts state regulators charged the firm's Boston office with allegedly using deceptive techniques to conceal its market-timing trades for several hedge funds, including Atlantique.

Shares of A.G. Edwards rose $1.06, or 1.5%, to $75.12 Wednesday.

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