Practice

Lance Brofman, a former principal of Fundamental Portfolio Advisors, a now defunct mutual fund group in New York, has been fined $250,000 by an SEC administrative law judge in New York and barred for life from associating with a broker/dealer, investment adviser or investment company.

The Securities and Exchange Commission, long the scourge of fund marketing departments, may have given marketers something to smile about in adopting new regulations on after-tax disclosure of performance information. The new regulations, which require funds to post before and after-tax performance information in prospectuses and advertisements promoting funds' tax management, provide some funds a new approach to marketing their product, said industry executives. The regulations were adopted Jan. 19.

The SEC has adopted a new rule that will require mutual funds to hold at least 80 percent of their assets in securities that are consistent with their names, said SEC Chairman Arthur Levitt, speaking last week to investors attending an SEC town hall meeting in Philadelphia.

WASHINGTON D.C. - An SEC examination has targeted between 30 to 40 mutual funds that are suspected of artificially inflating their quarter-end performance by engaging in a trading scheme known as portfolio pumping, said Lori Richards, director of the SEC's office of compliance, inspections and examinations.

WASHINGTON, D.C. - The SEC is planning to issue additional guidance to the fund industry sometime before April on securities valuations, said Douglas Scheidt, chief counsel for the SEC's division of investment management.

A significant number of investors in retirement are planning to increase their contributions to their 401(k) plans and become more aggressive in their allocations in 2001, according to a recent survey by Fidelity Investments of Boston.

Coming on the heels of the SEC's issuance earlier this month of mutual fund trustee independence rules, the occasion of the new president's inauguration has raised a new question about trustee independence.

WASHINGTON, D.C. - The SEC is planning to issue additional guidance to the fund industry sometime before April on securities valuations, said Douglas Scheidt, chief counsel for the SEC's division of investment management.

Mutual funds should be required to report their fees in dollar figures in their semi-annual reports to shareholders, according to a Securities and Exchange Commission study on fund fees issued last week.

Although the SEC's recently-adopted directors rules do not break new ground, they do codify existing standards and will likely encourage independent directors to seek independent legal representation, according to industry lawyers.