NEWS SCAN
Morgan Stanley To Pay $100,000 to New Jersey Bureau of Securities
Morgan Stanley and Co. has agreed to pay $100,000 to the New Jersey Bureau of Securities. This came after Bureau investigators found the company was in violation of state securities laws and regulations in its sale of non-traditional exchange-traded funds to investors.
Included in the settlement is $65,000 in civil penalties, $25,000 for reimbursement of the Bureau's investigative costs and $10,000 for Bureau use in investor education. New Jersey investors previously received $96,940.34 in restitution from Morgan Stanley.
"When investors are not told all material facts about financial investment opportunities, they often suffer losses they might otherwise have avoided. This case clearly illustrates this point and underscores how our Bureau of Securities works to protect investors when our regulations are not followed," Acting Attorney General John J. Hoffman said in a statement.
Some of the violations by Morgan Stanley against the state's Uniform Securities Act included: failure to provide adequate training to its financial advisors regarding non-traditional accounts; failure to implement a reasonable system for supervision of the sale of non-tradional ETFs and allowing its financial advisors to solicit unsuitable investors to purchase non-traditional ETFs.
Morgan Stanley has since taken actions to correct these violations.
"Investors depend upon their investment advisors to offer them securities that are appropriate for their level of risk tolerance, and with full disclosure of all relevant terms. In this matter, we found that Morgan Stanley's staff lacked proper training about non-traditional ETFs, and that the company failed to adequately supervise its personnel handling ETF transactions, to the detriment of investors," said Abbe R. Tiger, Chief of the New Jersey Bureau of Securities in a statement.
Former Goldman Sachs PM Donald Mulvihill Dies
Goldman Sachs Portfolio Manager and Executive Donald J. Mulvihill Jr. died on July 19 at age 56 in the Chicago area.
After more than 32 years with Goldman Sachs, Mulvihill retired in June. His most recent position was as the co-chief investment officer of the Quantitative Investment Strategies group within Goldman's Investment Management Division.
Since 2010 he was responsible for the Customized Beta Strategies groups. Mulvihill joined the Quantitative Group in 1999.
Northern Lights Launches Distribution Educational Series
Northern Lights Distributors, announced the upcoming launch of an educational series to provide advisors with information detailing each step of the mutual fund distribution process.
The four components of mutual fund distribution--Sales, Key Accounts, Portfolio and Executive Management and Marketing and Public Relations--are explained in the first educational report in its series, which also includes videos and other multimedia materials. All resources will be posted on the "Distribution 101" section of its website, nldistributors.com, launching later this year.
"Every part of the mutual fund distribution process plays a crucial role in advisors' ability to grow their assets under management," said Jonathan Poyer, NLD Distribution Manager in a statement. "This educational series is designed to provide advisors with the necessary information to bring their funds to market and understand the teams and resources that NLD provides throughout each step of the process."
Driven by their mission to help advisors navigate the distribution universe, NLD provides both top-down and bottom-up approaches to distribution. Top-down distribution occurs when a broker-dealer, RIA or wirehouse activates selling agreements with particular funds or fund trusts at the corporate level following the completion of due diligence.
Bottom-up distribution entails broker-dealer, RIA or wirehouse wholesalers identifying a need for a fund in the market and then working at the corporate level to make it available.
RESEARCH
$3.54 Billion Added to Mutual Funds
Total estimated inflows to long-term mutual funds were $3.54 billion for the week ending Wednesday, July 17, 2013, as reported by the Investment Company Institute.
PRODUCTS
ETF Lineups Continue to Grow at Vanguard
The Vanguard ETF product line that was recently launched in the U.S. includes three low-cost fixed-income ETFs: Vanguard Total International Bond ETF (BNDX), Vanguard Emerging Markets Government Bond ETF (VWOB) and Vanguard Short-Term Inflation-Protected Securities ETF (VTIP).
In addition to U.S. expansion, the company has broadened its suite of products to include Australia, Canada and Europe. The first Vanguard ETF also debuted in Hong Kong.
WisdomTree Rolls Out Small-Cap Dividend Growth ETF
WisdomTree launched its latest dividend growth ETF the WisdomTree U.S. SmallCap Dividend Growth Fund (DGRS). It joins the company's U.S. Dividend Growth Fund (DGRW).
Both funds track fundamentally weighted, WisdomTree-managed indexes of companies found in the broader WisdomTree Dividend Index with the best combined rank of growth and quality factors, such as return on equity, return on assets, and long-term earnings growth expectations.
ARRIVALS
High-Ranking Exec Moves at Janus
Janus announced some high-ranking executive changes recently.
The firm promoted its longtime CFO, Bruce Koepfgen, to a newly created role, as president of Janus. Koepfgen's new role will involve "business leadership." The firm's CEO, Richard Weil, added that Koepfgen would become "more deeply involved in driving our global business forward."
Janus also promoted the firm's senior vice president and treasurer, Jennifer J. McPeek, to CFO. She joined Janus in 2009 after overseeing strategic planning at ING Investment Management - Americas Region.
Lincoln Financial Appoints Head of Finance and Strategy
Lincoln Financial Group Distribution has named Beth O'Brien Senior Vice President and Head of Finance and Strategy to help drive growth for Lincoln's two leading distribution franchises: Lincoln Financial Distributors and Lincoln Financial Network.
O'Brien joins Lincoln from Genworth Financial, where she was Vice President of Life Product Development.
Another Lincoln appointment that was announced is that of Troy Fontenote as a Sales Director for the Institutional Retirement Distribution (IRD) team. Fontenote supports the Southcentral region of the country and is based in Houston.
State Street Names Chief Analytics Officer
State Street Corporation named Roger M. Stein chief analytics officer for State Street Global Exchange.
Stein will direct all aspects of Global Exchange's new product offerings and provide support for sales engagements.
"Roger has an impressive reputation and an acute ability to merge quantitative research and data to develop products that address key issues facing institutional investors," said Jeff Conway, executive VP and head of State Street Global Exchange.
