Strong Funds Chairman Engaged in Market Timing, Spitzer Says

Updated from 7:56 a.m.

We now know how high market timing allegedly went at Strong Capital Management.

New York Attorney General Eliot Spitzer expects to file charges against Richard Strong, chairman and founder of the closely held Menomonee Falls, Wis., fund firm, for allegedly engaging in abusive short-term trading of Strong funds over the past five years, according to officials in Spitzer's office. A spokeswoman said the charges would likely come sometime next week. Spitzer's office hasn't decided yet what specific charges would be levied, but criminal charges are under consideration.

The allegation is among the most stunning in the widening fund scandal since Spitzer first revealed on Sept. 3 that Strong Capital, Janus(JNS Quote), Bank of America's(BAC Quote) Nations Funds and Bank One(ONE Quote) allowed hedge fund Canary Capital Partners to engage in abusive trading of their funds in exchange for assets that would raise the fund firm's fee collection. Richard Strong, whose net worth was estimated at $800 million on the Forbes 400 list, allegedly made about $600,000 in profits from his short-term trading. ...