Client Alert

Market-timing Scandal Leads to Variable Insurance Annuities

October 27, 2004

William F. Sullivan, Peter M. Stone and Jay C. Gandhi

While the latest headline news from New York Attorney General Eliot Spitzer’s office concerns the insurance industry and “contingent commissions,” another alleged “scandal”—market timing— may be quietly boiling beneath the surface for the insurance industry as well. Many of the most highly esteemed mutual fund families have been mired in the wake of the market timing investigations. “Market timing,” previously an obscure term of art in the securities business and while never illegal per se, has now become a household phrase, garnering some of the largest monetary settlements regulators have ever reached.

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