Portfolio

The Financial Industry Regulatory Authority (FINRA) has widened its ongoing auction rate securities (ARS) probe with a sweep letter aimed primarily at sellers, rather than lead managers, of the illiquid instruments.The six-page letter, sent last week to 40 broker-dealers, contains a laundry list of requests covering the period from June 1, 2007 through June 30, 2008. Firms must produce all documents, electronic or otherwise, indicating any arrangement with other parties, including ARS issuers and auction agents, to sell, remarket or solicit bids for the securities.“It appears that FINRA is interested in doing a thorough investigation, given the depth and breadth of the request,” said Brian Rubin, Washington, D.C.-based partner in law firm Sutherland Asbill & Brennan and former deputy chief counsel of enforcement at FINRA predecessor NASD.State regulators and the Securities and Exchange Commission have thus far pursued charges against firms -- including Citigroup, UBS Financial Services, Merrill Lynch & Co., Goldman Sachs Group and Deutsche Bank -- that have been lead underwriters as well as sellers of the securities.“Now, it appears that FINRA is looking at selling firms,” Rubin said.FINRA spokesperson Herb Perone would not comment on the letter except to say how many firms received it.Allegations against lead managers have focused on internal communications detailing problems with the auction rate securities market that were not disclosed when the products were sold.With the new sweep letter, according to Rubin, FINRA appears to be investigating whether the selling brokers obtained information from the lead managers that they failed to disclose to clients. The self-regulatory organization is also looking at basic sales practices including whether the securities were suitable investments, misrepresentations were made and advertising was fair and balanced.

Total assets of money market mutual funds dropped by $625 million to $3.573 trillion for the week ending Aug. 27, according to the Investment Company Institute.Assets of retail money market funds fell $4.90 billion to $1.234 trillion, taxable money market fund assets fell $2.75 billion to $928.49 billion, and tax-exempt fund assets fell by $2.16 billion to $305.29 billion.Institutional money market fund assets increased by $4.28 billion to $2.339 trillion, taxable money market fund assets rose by $8.50 billion to $2.135 trillion, and tax-exempt fund assets fell $4.22 billion to $203.90 billion.

The Pension Protection Act is succeeding at encouraging employers to automatically enroll and annually increase contributions for workers, Vanguard has found in an analysis of the defined contribution plans it administers.

When it comes to retirement and finances, members of Generation X and Generation Y talk the talk but they don’t walk the walk.

The Securities and Exchange Commission has opened a 60-day public comment period to see whether the U.S. should adopt international reporting standards.

When 12b-1 fees were established in 1980 as a way to help mutual funds gain investors, the industry was far smaller than it is today.

While hybrid mutual fund and annuity product solutions began gaining advisers’ and investors’ attention last year, such managed payout funds still have flaws. That’s according to a report from MarketWatch.

New York Attorney General Andrew Cuomo is reportedly looking into whether Fidelity Investments might have been motivated to sell Goldman Sachs' underwritten auction-rate securities due to a pre-existing business relationship.

Credit Suisse Group announced it was acquiring a majority interest in Asset Management Finance Corp. of New York from National Bank Financial of Canada.

The European Commission’s legal certainty group (LGC) has issued a set of recommendations designed to help improve and harmonize post-trade securities processing across the European Union.