(Corrects headline and second paragraph to reflect litigation is six years old, not seven)
NEW YORK May 5 (Reuters) - The U.S. Securities and Exchange Commission has dropped its lawsuit against a senior executive of Gabelli Funds LLC over alleged abuses involving a hedge fund's rapid trading, a year after the U.S. Supreme Court said the regulator waited too long to pursue a key part of its case.
Ending six years of litigation, the SEC agreed to dismiss its remaining claims against Bruce Alpert, the Gabelli firm's chief operating officer, a Friday court filing shows. The SEC last August had dismissed related claims against another Gabelli fund executive, Marc Gabelli.
Kathleen Massey, a lawyer for Alpert, had no immediate comment. The SEC did not immediately respond to requests for comment.
In its April 2008 lawsuit, the SEC had accused Alpert and Marc Gabelli of letting a hedge fund conduct hundreds of "market timing" trades, which are considered improper though not illegal, without telling investors about the arrangement.
But the Supreme Court ruled that because the alleged wrongful conduct ended in August 2002, the regulator could not pursue civil penalties under a law setting a five-year deadline from when a claim "accrued" to sue.
The SEC had argued that the clock began to tick when it first discovered the conduct.
Gabelli Funds LLC agreed in April 2008 to pay $16 million to settle a related SEC case.
Gamco Investors Inc is the Rye, New York-based parent of the Gabelli funds. It is led by founder Mario Gabelli, who is Marc Gabelli's father.
The case is SEC v. Alpert, U.S. District Court, Southern District of New York, No. 08-03868. (Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)