Money Management Executive Latest News

Securities regulators are turning their attention to making sure investors are fully aware of newly enacted safeguards aimed at disclosing obscure fees sometimes hidden in mutual funds' prospectuses, The Washington Post reports.

A rally in the fourth quarter boosted most equity funds, which rose an average of 13.6% for the year, well above the S&P 500's 9% gain.

Mutual funds had stronger net inflows in November than in the month before or the year earlier, according to Financial Research Corp.

NASD announced it collected $102 million in fines throughout 2004, filed 1,360 enforcement actions and barred or suspended 830 people. NASD officials also brought 120 disciplinary actions against securities firms regarding mutual fund sales and trading, including late trading and sales compensation practices.

Fund traders see the stock market poised for another year of positive returns in 2005, but expect weakness in the dollar and a dropoff in corporate earnings to limit its upside potential.

As assessment of the Indian Ocean tsunami continues, fund analysts beginning to measure financial risk in the region said equity and fixed-income markets remained stable. Despite the colossal human tragedy and destruction of 20,000 miles of coastline, they did not expect economies in the region or mutual funds with investments there to be tremendously impacted.

The mutual fund industry has weathered its midlife crisis, a two-year period marked by the trading scandal, and is now on the way to becoming a mature industry, Ernst & Young reports in its annual "State of the Financial Services Industry Report."

Regulators are reportedly turning their attention toward J.P. Morgan Chase for its role in facilitating improper trades by Canary Capital Partners, the hedge fund that touched off the mutual fund trading scandal. The Securities and Exchange Commission is questioning whether J.P. Morgan met its obligations to police its client's activities after extending up to $150 million in credit to the hedge fund. Officials from J.P. Morgan's legal defense team at Davis Polk & Wardwell noted in an internal memo that their client was oblivious to Canary's misconduct, but SEC officials are building a case stating ignorance is no defense.

The Internal Revenue Service has just issued guidance on a rule that has been on the books since 2001 to prevent employers from liquidating 401(k) rollover accounts with values between $1,000 and $5,000.

The Securities and Exchange Commission has requested information from Warren Buffet's General Re about the sale of products to generate steadier earnings. The SEC is interested in a type of reinsurance known as a finite loan, which comprised 20%, or $10 billion, of General Re's insurance reserves for 2003. Used properly, insurers will make finite loans to other insurers in exchange for premiums. But critics say that some insurers set the premiums to be paid at a later date to smooth earnings, an accounting violation.