$190-Million Charge for Alliance

From Associated Press

Alliance Capital Management is taking a $190-million charge for restitution and litigation costs associated with its market-timing activities and has begun seeking the resignations of employees in its mutual fund distribution unit.

Alliance, which has ousted two of its top leaders amid the expanding mutual fund industry scandal, said late Friday that the after-tax charge would reduce net income by about $146 million in the quarter ended Sept. 30.

Alliance is one of the nation's largest money managers, with more than $450 billion in assets under management.

Market timing is the use of quick, in-and-out trades that skim profit from longer-term shareholders. The practice is not illegal, but most funds do not allow it. Regulators have indicated that funds that officially prohibit the practice but make exceptions are committing fraud.

The company said it had sought the resignation of two employees, including the manager of its AllianceBernstein Technology Fund, and would be requesting others.

Some employees already have been asked to resign, but an Alliance spokesman said Sunday that he did not know how many.

Alliance is one of numerous firms that have acknowledged allowing market timing in a scandal that has spread rapidly across the $7-trillion mutual fund industry.

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