Practice

Regulators are not just targeting those in cahoots with market timers. Now, any firm that failed to do enough to keep the wolves out of the pen is fair game.

The SEC's top regulators have chastised mutual funds. State regulators have fired harsh salvos at them. And to put it quite mildly, the national press has gone to town.

Canadian Imperial Bank of Commerce announced last Monday that it would pour $37 million to reform and educate employees on corporate governance. The funding is, in part, forced by a December settlement with federal regulators stemming from its links to the blown-up accounting practices at Enron.

Regulators have gone straight for the throat of FleetBoston, charging two of the company's Columbia units with orchestrating a "massive" market timing scheme and seeking to enjoin Columbia Advisors from serving as advisor to its own mutual funds.

It's not every day one encounters a company that's content to be No. 2. But that's exactly the business plan of Principal Retirement & Investor Services. While Principal serves three million investors in 40,000 employer plans, most of those plans are at companies with 1,000 workers or less.

The head of the world's No. 1 mutual fund company said last Tuesday that forcing firms to hire independent chairmen might not be the end-all solution to fixing problems in the industry.

James T. McCurdy, a 23-year veteran mutual fund auditor who was recently sanctioned by the Securities and Exchange Commission and given a one-year "time out" from the industry, has vowed to appeal that decision to the SEC's Commissioners, and will file for a stay of that penalty.

Understanding mutual fund statements should be a heck of a lot easier now that federal regulators have okayed new disclosure rules that would spell out more clearly the fees imposed on shareholders.

Fifteen brokerages settled with the SEC and NASD for $21.5 million for not providing customers with $86 million worth of breakpoint discounts they were owed. The deal, struck earlier this month, also requires the firms to repay investors what they are owed.

Registering with the SEC should not be a requirement of hedge funds, at least not in the mind of Federal Reserve Chairman Alan Greenspan.