Practice

A U.S. District Court jury in San Francisco found in favor of the three former independent mutual fund trustees being sued by Louis Navellier and his asset management firm, Navellier Investment Management of Reno, Nev.

For the second time in a month, regulators have issued a warning to mutual fund companies on their advertising practices.

It may no longer be enough for a mutual fund company to supply defined contribution plan participants with a trusted brand name, a diversified portfolio of funds, strong performance and a glossy investment kit.

While ensuring auditor independence may make good business sense in the mutual fund industry, actually achieving it may be very difficult. But, difficult as it may be, it is a problem that mutual fund companies and accounting firms will no doubt have to tackle in the near future.

Why would a mutual fund company want to be bothered offering a 401(k) plan to a company with fewer than 100 employees when a 401(k) account at a single Fortune 500 company can mean tens of millions of dollars of assets under management?

NASD Regulation has postponed indefinitely the idea of adopting new rules which would have changed the way mutual fund companies pay broker/dealers for sales.

The Investment Company Institute's new voluntary guidelines for mutual fund directors could increase the turnover of fund directors by more than one-third in the next five years, according to an industry consultant.

A system which some industry lawyers say has become an anachronism for large mutual fund complexes - having one board of directors for each mutual fund in a complex - may be headed for extinction.

The courts have dealt another setback to shareholders challenging the independence of mutual fund directors.

NASD Regulation has posted on its web site, www.NASDR.com, responses to frequently asked questions about NASDR's new non-cash compensation rules for the sale of mutual funds and variable annuities. The information, posted in a question-and-answer format, covers 22 areas which have drawn inquiries from NASD members. The new rules took effect Jan. 1 and limit how sales contests can be used to reward intermediaries for mutual fund and variable annuity sales.