Money Management Executive Latest News

The Securities and Exchange Commission has begun talks with Fidelity Investments into the inquiry whether the acceptance of lavish gifts by traders harmed shareholders, according to The New York Times. In December, Fidelity paid $42 million to its mutual funds following an internal investigation into the matter by the funds’ trustees. The probe found that Fidelity failed to oversee traders who accepted expensive travel and entertainment gifts from brokers seeking to handle stock trades on Fidelity’s behalf. Attorneys, speaking on condition of anonymity because the investigation is ongoing, said a key issue in the settlement talks is whether the SEC will succeed in its debate that the gift giving harmed shareholders. Previous statements by the SEC indicated the regulator is focused on the question of harm, financial or otherwise. Fidelity has said publicly that it cannot be demonstrated that any Fidelity fund of shareholder suffered financial harm as a result. The company has taken the same stance in the settlement talks, attorneys said. Anne Crowley, Fidelity spokeswoman, said the company would not comment on its discussions with regulators. The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

Regulators in Utah have dropped charges of fraud and apologized for dinging the reputation of two First Western Advisors brokers, according to the Salt Lake Tribune. The Utah Securities Division last week said First Western brokers Brian G. Kasteler and David A. Russon had, with other brokers, collected tens of thousands of dollars in commissions by selling inappropriate class shares of mutual funds to clients. The state named nine First Western investors with more than $20.6 million under management with the firm as victims of a scheme. Kasteler and Russon presented regulators with evidence of the performance of the Class B shares. “They listened too late, but they finally listened, and we’re grateful for their expression of regret,” Russon said. Securities Division Director of Licensing George Robison admitted that no client had complained to regulators, and that investigators did not ask First Western about the concerns before filing charges. The data came from the federal Securities and Exchange Commission, which conducted a periodic brokerage audit. In exchange for dropping the charges, state regulators required the brokers to contact the clients and offer them the option to convert their more expensive Class B shares to Class A. “We’ve already done that, and none of our clients have taken us up on that offer,” Russon said. The division still has charges pending against two other advisors and First Western. The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

The China Banking Regulatory Commission has given the green light to the Agricultural Bank of China to set up a joint-venture fund management firm with Calyon, a subsidiary of Credit Agricole, China Daily reports. However, the China Securities Regulatory Commission still must approve the new firm.

While the bear market and the fund scandal have taken a tremendous toll on Janus since 2000, Morningstar says the firm has, once again, returned to its roots as a solid investor and stock researcher.

As more investment advisors bring exchange-traded funds to market, industry leaders are becoming more aggressive about pitching their wares to financial advisers, Yahoo Finance reports.

Bear Stearns has filed with the Securities and Exchange Commission to offer an actively managed exchange-traded fund that would invest in money market funds and short-term fixed-income obligations, The Wall Street Journal reports. The latter would include U.S. government securities, U.S. and foreign bank obligations, corporate debt obligations and other income instruments.

Lipper of New York Wednesday night honored mutual funds that delivered consistently superior performance over three years. The ceremony, at the Mandarin Oriental Hotel in Manhattan, marked Lipper’s fifth such ceremony.

The Securities and Exchange Commission has gotten the Veras hedge funds to agree to return $38 million to 810 mutual funds that they market timed.

When Fidelity Investments investor Eric Cohen found out that the fund giant had a big stake in PetroChina, which does business in Sudan, he launched FidelityOutOfSudan.com to try and convince Fidelity to sell stocks in companies making a profit in the war-torn region, many of them energy-related firms, USA Today reports. Since then, Cohen has convinced 4,000 people to sign a petition urging Fidelity to reconsider its investments.

Commerzbank has finally reached an agreement to sell its Jupiter fund division to the Jupiter management team and a handful of executives, as well as private equity firm TA Associates for $1.4 billion, five years after first seeking a buying, Bloomberg reports. Commerzbank didn’t reveal the purchase amounts by Jupiter or TA Associates.