Hedge fund Ritchie Capital Management has reached a $40m (€27.3m) settlement with the US Securities and Exchange Commission over charges it engaged in late trading in mutual funds, one of the largest settlements of its kind to date.

The regulator alleged that Ritchie Capital engaged in illegal late trading from the start of 2001 to September 2003, placing thousands of trades in mutual fund shares using information obtained after the market closed. The trades were made on behalf of Ritchie’s global multi-strategy fund.