Money Management Executive Latest News

Fidelity Investments is gearing up for a fight with federal regulators now questioning a business relationship between a pair of siblings who handle a fraction of the fund giant's trading business. Fidelity trader David K. Donovan and his younger brother, Peter Donovan, an employee of Bank of American Securities, are under investigation for forging an improper business relationship, attorneys close to the case told The Boston Globe last week.

Say it ain't so, Fido.

Managed account platform providers, those vendors who provide various services to financial services companies that offer managed account services to wealthy clients, may be able to boast about tremendous growth in assets in the years ahead, but they are nonetheless in for some challenges.

The largest scandal in the mutual fund industry's 80-year history has prompted regulators to revamp how funds conduct business by implementing a series of reforms. Dozens of firms have been sued and accused of fraud, a handful of executives are facing criminal charges and investors have realized how little they really know about how their retirement dollars are being invested.

First Command Financial Services, a leading seller of financial products to military personnel, agreed last Wednesday to pay $12 million to settle allegations that it used shady sales practices to pitch mutual funds to thousands of enlisted men and women over the last five years.

SEC Governor Cynthia Glassman once again spoke out vehemently against the Commission's new rule that will require fund boards to have independent chairmen. "This debate is not over," she said, referring to a lawsuit that the U.S. Chamber of Commerce has brought against the SEC and a request by Congress for the Commission to look at the effects of the new rule.

Investment Company Inst. Names Ahearn to PR Post, Reid as Chief Economist

Nearly one year ago, on Jan. 14, 2004, JPMorgan Chase and Bank One announced plans to merge the two banking companies. Although the merger was officially finalized on July 1, the two entities are still in the process of melding operations, including both mutual fund families, and transitioning Bank One's private client services division catering to wealthy individuals into the JPMorgan fold. Up until the merger, JPMorgan only catered to the mega-wealthy market through its private banking unit.

More mutual fund groups are launching asset-allocation funds with greater overseas diversification. However, unlike global funds that purchase foreign stocks worldwide, the new generation of products are funds-of-funds.

The Investment Company Institute will lobby for tax reductions on capital gains distributions in 2005.