The SEC brought an administrative action against Chronos Asset Management, Inc. and Mitchell L. Dong. The SEC found that Chronos and Dong engaged in a fraudulent market timing and late trading scheme. From January 2001 to September 2003, Chronos and Dong used deceptive means to continue market timing in mutual funds that had previously attempted to detect and restrict, or that otherwise would not have permitted, Chronos' trading. In addition, from May 2003 to September 2003, Chronos traded mutual fund shares after 4:00 p.m. eastern time while receiving the same day's price. By virtue of their conduct, the SEC found that Chronos and Dong willfully violated, and aided and abetted and caused violations of Section 17(a) of the 1933 Act, Section 10(b) of the 1934 Act and Rule 10b-5 thereunder, and willfully aided and abetted and caused violations of Rule 22c-1(a) of the 1940 Act.

The SEC censured Chronos, suspended Dong from associating with an investment adviser or investment company for 12 months, ordered Chronos and Dong to pay disgorgement in the amount of $303,000 plus prejudgment interest in the amount of $73,915.80, and a civil money penalty in the amount of $1,800,000.

Please click http://www.sec.gov/litigation/admin/2008/33-8883.pdf for a copy of the administrative order.