Unit of Invesco Is Expected to Face Civil Charges

Securities regulators probing trading abuses in the mutual fund industry are expected to file charges against a unit of Denver-based fund firm Invesco as soon as today, according to a person familiar with the case.

Both New York Atty. Gen. Eliot Spitzer’s office and the Securities and Exchange Commission are expected to file civil charges against Invesco Funds Group, a unit of Invesco that offers mutual funds to retail investors, as well as a number of senior executives who have worked at the company, the person said. The charges will be based on alleged “market timing” activities by certain fund managers.

Invesco, a unit of U.K.-based asset management company Amvescap, is the latest in a string of asset managers to be targeted in the probes into mutual fund trading. Market timing is not illegal, but fund companies can be in violation of their fiduciary duties if they publicly discourage investors from engaging in the practice and then allow selected investors to do it.

A spokesman for Amvescap, which made the investigation public last week, said the company would “vigorously” fight any charges that are filed.

Invesco Funds Group “has not engaged in any wrongful conduct,” Amvescap said in a statement. “Any charges that may be filed against [it] or its employees will be vigorously contested.”

The company said Invesco had responded to regulators’ allegations in a so-called Wells submission to the SEC. The company said it had defended its actions with facts, information on industry practices, and public policy considerations that demonstrated compliance with legal obligations and duties to its clients.