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Alliance Capital

(AC) - Get Associated Capital Group, Inc. Class A Report

reportedly has offered to cut the annual fees it charges investors, as part of a proposed settlement with New York Attorney General Eliot Spitzer's office.

Alliance is in negotiations with regulators over the issue of whether it allowed improper trading in its funds, at the expense of investors. The settlement talks could still could fall apart, according to a report in

The Wall Street Journal

. Alliance wasn't available immediately for comment.


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Securities and Exchange Commission

is also in settlement talks with Alliance. Ever since Spitzer fired the first salvo in the

mutual fund industry probe in September, critics have accused the SEC of looking away from mutual fund abuses.

Last month

the whip came down on two high-level officials at Alliance, as the firm scrambled to address the trading scandal. The company said John Carifa -- the firm's president and chief operating officer, as well as a director of the company and the chairman of a separate board devoted to the firm's mutual funds -- resigned, as did Michael Laughlin, chairman of Alliance's fund-distribution unit.

Alliance CEO Lewis Sanders said at the time that he had requested the two resignations "because they had both senior and direct responsibility over the firm's mutual fund unit, which, as previously reported, allowed inappropriate market-timing transactions, some of which had an adverse impact on mutual fund shareholders."

Alliance also said at the time that it would cooperate with authorities and that "there is a high likelihood that Alliance Capital will face sanctions and penalties as the firm works to bring this matter to a close."