Regulation

Justin F. Ficken, a former broker with Prudential Securities, pled guilty before U.S. District Judge Patti B. Saris on Monday to deceptively market timing mutual funds for seven hedge funds between January 2001 and September 2003, earning himself and two other brokers a combined $6 million in commissions.

Identity theft, data loss and other privacy violations are among the leading threats faced by financial institutions. Depending on their nature, they can inflict reputational and brand damage, cause revenue losses and prompt civil liability suits by customers. What's more, regulators are taking an increasingly hard line in these matters. Two new regulatory measures to safeguard investor privacy have far-reaching implications for investment companies, and executives need to take steps to comply.

The Securities and Exchange Commission plans to propose as early as the end of the month rules that would enhance municipal disclosure, SEC Chairman Christopher Cox said in an interview.

Market unrest, the credit crisis and an updated FAS 157 are prompting mutual fund companies to be more meticulous about fair value pricing, Deloitte reported Monday in its “2008 Fair Value Pricing Survey,” its seventh annual such report.

With Lehman Brothers filing for Chapter 11 bankruptcy protection, investors are fearful their holdings could be decimated, but regulators have been stepping in to reassure them that their mutual fund and brokerage accounts are safe, The Wall Street Journal reports. The Securities and Exchange Commission said that some of its staff were working within Lehman’s offices to ensure customer accounts are protected.

Fidelity Investments reached agreements with New York and Massachusetts officials to buy back at par $300 million of auction-rate securities from its customers by the end of the year, becoming the first retail brokerage firm to settle alleged fraudulent sales practices in the ARS market.

Fidelity will buy back $300 million worth of auction-rate securities from its brokerage customers, according to the Associated Press, citing an individual close to the talks. In so doing, it will settle an investigation by New York Attorney General Andrew Cuomo, and the announcement could possibly be made this afternoon.

Mark Schonfeld, the high-profile New York regional director of the Securities and Exchange Commission, has left the SEC after 12 years of service to join Gibson Dunn as co-chair of the securities enforcement practice group. In this position, he will also work closely with the crisis management and white collar defense and investigations groups.

Bruce Bent, chairman of The Reserve and the creator of the first money market mutual fund, is breaking from the pack that has been critical of the Securities and Exchange Commission’s proposal of the rule governing money funds to lessen their reliance on credit rating agencies, Dow Jones reports.

The top enforcement attorney at the Securities and Exchange Commission, Mark Schonfeld, is reportedly leaving next month to join a private law firm.