Practice

Mutual funds and custodians have until next year to comply with new federal securities rules designed to insure that fund securities held abroad are properly safeguarded.

The adviser to the Monetta Family of Mutual Funds and the company's top executive will appeal a recent Securities and Exchange Commission ruling that the firm and executives associated with the funds committed fraud.

At an upcoming roundtable on investment advisors May 23, the Securities and Exchange Commission will explore whether investment advisors should form a self-regulatory organization in the manner of the National Association of Securities Dealers, among other issues.

The SEC appears to have succeeded with its appeals to the mutual fund industry to limit redemption fees to two percent.

A written agreement that established specific guidelines on how a market timer could time investments in AIM Asset Management's funds is the subject of a lawsuit filed by the market timer against AIM's transfer agent.

BOSTON - A form of mutual fund style drift is now being examined by the Securities and Exchange Commission in its review of mutual funds and their performance advertising practices.

A hearing held May 1 on a request by Scudder Kemper Investments of Boston for a preliminary injunction against Robert Hoffman, Scudder's former managing director, gave no clues as to the possible outcome of pending arbitration between the two parties, according to an industry lawyer.

The SEC is looking into how fund companies process money earmarked for closed funds, said Cindy Fornelli, an advisor to Paul Roye, director of the SEC's division of investment management.

Although assets in socially-responsible funds have grown from $1.185 trillion in 1997 to $2.16 trillion in 1999, socially-screened funds are under-represented in 401(k) plans, said mutual fund industry executives.

A hearing on a request by Scudder Kemper Investments of Boston for a preliminary injunction against Robert Hoffman, Scudder's former managing director, is scheduled for May 1. A hearing was scheduled after Scudder filed a complaint in U.S. District Court April 17 alleging Hoffman is violating terms of a separation agreement he signed with the firm. If issued, the injunction would prohibit Hoffman from hiring Scudder-Kemper employees or soliciting any of its clients. A temporary restraining order to prevent Hoffman from hiring Scudder employees was issued when the complaint was filed.