Gabelli Funds, an investment adviser to mutual funds, on Thursday agreed to pay $16m to settle Securities and Exchange Commission charges involving a market-timing arrangement with a UK-based hedge fund.

The agreement with Gabelli Funds, which neither admitted nor denied the agency’s findings, came as the SEC separately filed a civil fraud suit in federal court against a former portfolio manager and the chief operating officer at Gabelli, accusing them of securities fraud for their roles in the alleged market-timing arrangement.