Executive at Pimco Sibling PEA Quits

Kenneth W. Corba, who regulators say allowed market timing trades at stock funds sold under the Pimco label, has quit as chief investment officer and portfolio manager at PEA Capital, the New York-based advisor to the funds.

Corba resigned Tuesday for personal reasons, firm spokesman Phil Neugebauer said.

Corba, who ran the $845-million Pimco PEA Growth Fund and the $95-million Pimco PEA Growth & Income Fund, could not be reached for comment Wednesday.

In a civil lawsuit filed in February, New Jersey securities regulators accused PEA, Pimco and related companies of fraud. They claimed that Corba helped arrange for a hedge fund’s rapid trading of mutual fund shares in exchange for investing other assets with the firm. The arrangement with the hedge fund ran counter to the policy on market timing stated in the funds’ prospectuses, regulators said.

Corba was not named as a defendant in the suit.

Certain bond funds managed by Newport Beach-based Pacific Investment Management Co., or Pimco, also were involved in market timing trades, the suit said. Pimco and PEA are sister companies, both owned by German insurance giant Allianz.

Bill Gross, who heads Pimco’s bond funds, has said Pimco would fight New Jersey’s allegations regarding the bond funds. In an interview with The Times in February, Gross sought to distance Pimco from PEA, saying the two firms didn’t interact.

Two PEA analysts will take over Corba’s stock funds, but the company doesn’t plan to name a replacement as chief investment officer, Neugebauer said. Greg Tournant will run Pimco PEA Growth and Stephen Bond-Nelson will run Pimco PEA Growth & Income.