The U.S. Securities and Exchange Commission issued orders instituting administrative proceedings and imposing sanctions against two executives of National Clearing Corp. in a market timing case.

The commission’s complaint alleged that NCC’s president and chief executive officer and its vice president of correspondent services, engaged in a scheme to facilitate late trading and market timing in mutual funds on behalf of its institutional customers. It says that from June 2002 through September 2003, NCC executed thousands of late trades in hundreds of mutual funds. And, it alleges that the executives directly participated in deceiving various mutual funds about NCC’s facilitation of fraudulent market timing trades.

The orders bar the pair from association with any broker or dealer with a right to reapply after five years and three years, respectively. The orders were based on the entry of final judgments by the Honorable Percy Anderson, U.S. District Judge for the Central District of California, which, among other things, enjoined the executives from violating the rules, and ordering them to pay civil penalties of US$200,000 and US$35,000, respectively. They consented to the entry of the final judgments, without admitting or denying any of the commission’s findings.