Three affiliates of German insurer Allianz AG on Tuesday said that they have agreed to pay a $15 million fine to settle allegations of improper mutual fund trading with the New Jersey Attorney General.

PEA Capital LLC and PA Distributors LLC, without admitting or denying any findings of improper fund trading, said they will reimburse the attorney general’s office for costs of an investigation and will implement new policies and procedures to strengthen corporate governance.

Their immediate parent Allianz Dresdner Asset Management of America was also a party to the settlement.

In a news release, the New Jersey Attorney General’s office said it dismissed its action against Pacific Investment Management Co., the California-based bond manager also known as PIMCO. PIMCO is also owned by Allianz AG.

"We have stated publicly from the moment the charges were filed in February that our people have acted in good faith, and that our clients’ interests have been protected," PIMCO’s chief investment officer Bill Gross and chief executive Bill Thompson said in a statement.

PEA is the adviser to a group of Connecticut-based funds while PA is the distribution arm of the company.

A consent order filed in the Superior Court of New Jersey alleged that PEA was engaged in a scheme with hedge fund operator Canary Capital Partners LLC from 2001 to 2003 which benefited PEA at the expense of long-term holders of PEA mutual funds.

The order charged that market timing arrangements with broker-dealer Brean Murray Inc. on behalf of Canary allowed the hedge fund $100 million of market timing capacity in exchange for placing $25 million of long-term assets in a separate fund.

Brean Murray was not named as a defendant in the New Jersey suit, nor was Canary.

Market timing arrangements, which are not illegal under securities laws, allow some large investors to make rapid fire trades that hurt returns of longer-term investors.

Canary made more than 200 market timing transactions over a period of a little more than a year, the consent order said. The transactions totaled more than $4 billion in purchases and redemptions.

The arrangements exceeded limitations of the fund’s prospectus, the order said.