Strong Financial founder, chairman, CEO and chief investment officer Richard Strong resigned from his company yesterday.
The move comes as regulators are investigating his fund complex and his own trading activity in the firm’s funds.
A majority investor, Strong will also seek to divest himself of voting control of the firm, a company statement said.
Strong Financial was one of four fund families to be named in New York Attorney General Eliot Spitzer’s unveiling of a massive investigation into the $7 trillion mutual fund industry in September – a probe that now includes the SEC, the NASD and at least two other state officials.
In early November, Strong stepped down as director of the company’s mutual funds board after Spitzer’s office said the fund boss had made as much as $600,000 over five years with improper trades.
Spitzer is said to be contemplating criminal charges against Strong, who allegedly timed his own funds for his accounts and those of family and friends.
A Spitzer spokesman declined to comment.
Strong has offered to reimburse his funds for any financial losses investors suffered due to his personal transactions. He has also said he does not believe his transactions were harmful to the company’s mutual funds.
Kenneth Wessels, former president of the Dain Rauscher Wessels Capital Markets division of Dain Rauscher, will replace Strong as chairman. Richard Weiss, a 12-year Strong veteran, will take over as chief investment officer.