Richard Strong resigned Sunday as chairman of the mutual fund company he founded amid an exploding controversy over trades he carried out in his own firm's funds.
Strong will remain chief executive of Strong Capital Management, the mutual fund company's adviser. The decision was disclosed Sunday in a statement by Strong's independent directors.
Richard Strong is currently being investigated by the New York attorney general and
Securities and Exchange Commission
for allegedly ringing up about $600,000 in profit by dipping in and out of Strong-managed funds in a strategy known as "market timing." The New York attorney general, Eliot Spitzer, is expected to file criminal charges against Richard Strong.
Earlier in the week, Richard Strong offered to reimburse investors for any additional costs his short-term trades caused for
Strong Mutual Fund
investors. He also said at the time that he would consider resignation.
"If it becomes appropriate, I would be prepared to step aside to enable new leadership to bring new energies to this company," Strong said Thursday.
The Strong company also said last week it planned to change its funds' board and to have a majority of independent directors hire former Securities and Exchange Chairman David Ruder to review compliance issues in the wake of the unfolding scandal.
Strong was one of the four fund companies accused in Spitzer's Sept. 3 complaint of allowing hedge fund
Canary Capital Partners
to make improper trades in their funds in exchanges for padded fees. Strong has also pledged to reimburse investors in the four funds in question if the firm determined investors were hurt by the trading.