Strong Capital Investments founder Richard Strong could be facing criminal charges, the Wall Street Journal reports.

Sources told the Journal that the New York attorney general's office is seriously considering filing criminal charges against Strong for allegedly personally profiting from improper trading in the mutual funds that his company runs. At the same time, the Securities and Exchange Commission is also pondering civil charges against Strong and his company.

Sources also told the Journal that the SEC could also seek a federal-court injunction against Strong if it concludes that Strong's latest actions violated a 1994 settlement

If the allegations are proven, Strong could be barred from managing money for clients or being affiliated with a firm in the mutual-fund business. He could also agree to a settlement. But, since Strong owns about 90% of Strong Capital Management, his role within the company cannot be easily diminished. Especially since while he hasn't managed mutual funds for several years, he has remained the firm's central decision maker and is actively involved in overseeing all the firm's money managers.

“We are facing all the potential prospects and doing so in a constructive and very sensible manner,” said Stanley Arkin, Strong's attorney. However, he added that he did not believe Strong’s actions were criminal.

Still, this isn’t Strong’s first run-in with regulators. In 1994, the company paid $444,300 in restitution to three of its own funds to settle SEC charges that it improperly moved securities among accounts that it ran during a three-year period ending in 1990. The company didn't deny or admit wrongdoing.

Additionally, the SEC has said that from 1987 to 1989, Strong traded securities in his own account at the same time the firm was recommending those securities to clients. As part of his deal with the SEC Strong promised not violate securities laws governing defrauding clients.  

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