Practice

Brace yourselves. Recent problems in the mutual fund industry with market timing arbitrageurs could spill over into the variable annuity industry.

The mutual fund industry, while still viable and in position to bounce back, needs drastic changes and needs them now, Securities and Exchange Commission Chairman William H. Donaldson said in a sometimes scathing, sometimes positive speech.

NASD Probes B/D Sales Of College Savings Plans

Fund industry executives who thought they might dodge the scandal bullet had their odds reduced drastically last week.

WASHINGTON - The crusade against mutual funds for ripping off customers is reaping benefits as Congress prepares to draft new legislation to curtail trading abuses and protect shareholders.

The Investment Company Institute's top officials presented ideas to the Senate and the Securities and Exchange Commission last week to fix the problems of late-trading, market timing and insider market timing. But they might soon need to add accurate NAV pricing to the list, as SEC Director of Enforcement Stephen Cutler testified before Congress last week that some funds are also guilty of purposely writing down their net asset values.

The National Association of Securities Dealers at press time was reportedly investigating Prudential Securities for potential late trading out of the company's Boston office.

Alliance Capital and Deutsche Bank are two other giants that New York's top regulator may come down on next, according to reports last week.

Strong Financial Chairman To Face SEC, State Charges: Wisconsin Also Joins Fray

A headache for the mutual fund industry has developed into a migraine as Putnam Investments and two of its portfolio managers have been accused of market timing their own funds.