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SEC Probes Mutual Funds For "Portfolio Pumping" and "Window Dressing"
The SEC is investigating the practice of portfolio pumping, which occurs when fund managers buy extra shares of a stock they already own to drive up the price of the stock near the end of a reporting period.
The SEC also is investigating the practice of "window dressing". That occurs when fund managers buy or sell securities at the end of a reporting period to mislead investors as to what assets the fund holds or what investment style the fund follows.
No funds have been identified publicly. One commentator suggests that these practices may be as prevalent, if not more prevalent, in the area of separately managed accounts, as well as with specialists and traders.
Source: Investment News, November 27, 2000
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