On February 14th, a federal district court, in a 128-page opinion, discussed the late trading and market timing of mutual funds. Although defendants' market timing practices would have violated the securities laws under current precedent, prior to 2003 the law was less clear. Although the SEC failed to establish that the funds in which defendants then traded prohibited market timing, the court found that the defendants' late trading was clearly a violation of the securities laws. The court therefore found the defendants liable for late trading but not market timing. Defendants must pay over $38 million in disgorgement, plus prejudgment interest, and over $38 million in civil penalties. SEC v. Pentagon Capital Management PLC. See also SEC v Pentagon Capital Management, Lit.Rel.No. 22262.