Money Management Executive Latest News

New York Attorney General Eliot Spitzer announced Wednesday he plans to formally charge Richard Strong, chairman and founder of Strong Financial, with using inside fund information to take $600,000 in market-timing profits between 1998 and 2001.

After realizing that disappointed informants – most notably Peter Scannell, the phone representative in the Putnam Investments case – are taking their knowledge to state authorities, the Securities and Exchange Commission is looking into the manner in which it deals with information received in the ongoing mutual fund scandal, Reuters reports.

The Securities and Exchange Commission indicted Edward J. Strafaci, a former manager of a prominent convertible arbitrage hedge fund with Lipper & Co., with two counts of securities fraud and two counts of investment advisory fraud. In total, they carry a maximum prison term of 30 years and $2.5 million in fines. The firm is one and the same company where founder Kenneth Lipper lost millions of dollars running a hedge fund for the rich and famous, including Julia Roberts, Liam Neeson and former Federal Reserve Chairman Paul Volcker.

In waiting three years to disclose his firm’s managers’ profits stemming from improper trading, Putnam Investments CEO Lawrence Lasser’s leadership was questionable, analysts and investors said Friday, Reuters reports.

CheckFree shares jumped 12% Monday, and were still up 8% Tuesday, as Bank of America’s largest bill-paying service looks to be adding Fleet to its customer line amid the pending buyout by BofA.

Although Putnam Investments had numerous stopgap measures to prevent market timing, it failed to establish a way to detect it in individual accounts within omnibus brokerage accounts or at the participant level in 401(k) plans. The nation’s fifth-largest mutual fund company also was aware that two of its chief investment officers were guilty of market timing as long as five years ago – yet it did nothing immediately to stop them. Nor did it order them to return the $700,000 in profits they had made.

Capital Markets Subcommittee Chairman Richard H. Baker (R-LA) will hold a meeting Tuesday to discuss whether mutual fund trading tactics that have been brought to the forefront as a result of New York State Attorney General Eliot Spitzer, have disadvantaged long-term investors.

New Lipper data shows at least one in four international and global mutual fund companies partake in market timing, Financial Times reports.

If the Securities and Exchange Commission approves a filing by DTCC, the not-for-profit clearing and settlement giant, best known for its work for the mutual fund industry, will be able to do the same for the separately managed accounts industry.

The investment management industry is poised for a major overhaul in the next three years, as asset managers are opting to retool their business models.