Former Alger Exec Receives Jail TimeDec 17, 2003 | www.cbsmarketwatch.com
James Connelly Jr., a former Fred Alger Management vice chairman, was sentenced in New York state court Wednesday to one to three years in prison, becoming the first executive connected to the snowballing mutual fund investigation to face a jail term.
Connelly pled guilty in October to tampering with evidence, admitting that he directed subordinates to delete e-mails pertinent to a subpoena from New York Attorney General Eliot Spitzer's office, which has been investigating trading abuses and other improper dealings at many fund firms.
Alger suspended Connelly and two other employees shortly after receiving the Spitzer subpoena. The privately held New York firm, which lost many employees during the Sept. 11, 2001 terrorist attacks, allegedly permitted market timing and illegal after-hours trading in four of its funds.
In October, Connelly paid $400,000 to the Securities and Exchange Commission to settle civil charges that Alger also let favored clients profit from rapid-fire trading of its funds.