Regulation

WASHINGTON - Regulators, employers and the financial services industry must work together to expand the use of 401(k) plans and increase worker participation, the Investment Company Institute's President and CEO Paul Schott Stevens said Wednesday at the institute's 50th annual general membership meeting.

Legg Mason, citing $206 million in charges tied to supporting money market funds with subprime and other illiquid fixed-income exposure, posted a net loss of $256 million in the first quarter, down from profits of $173 million in the year-ago period.

Former AllianceBernstein mutual fund sales manager John Carl won a $12 million arbitration lawsuit for having been dismissed from the company on the pretext of his role in the market-timing scandal.

Securities and Exchange Commissioner Paul Atkins has announced he will leave the agency when his term expires in June to return to the private sector.

The turmoil in the $330 billion auction rate securities (ARS) market has spurred a series of investigations by the Securities and Exchange Commission, the Financial Industry Regulatory Authority (Finra), and Massachusetts securities regulators. Congressional leaders are calling for relief, allowing mutual funds to provide liquidity to retail investors holding the securities.

A Federal appeals court yesterday upheld a 160-month, or 13-year, three-month, sentence for stockbroker and frequent CNN guest Todd Eberhard.

Pointing to illiquidity and poor fair valuation conditions, two ranking Congressmen have asked Securities and Exchange Commission Chairman Christopher Cox to cut mutual fund portfolio managers a break on redemptions of auction-rate securities.

The Securities and Exchange Commission has filed a settlement enforcement action against Bank of America’s Banc of America Investment Services Inc. for failure to disclose it favored two mutual funds.

The Financial Industry Regulatory Authority’s National Adjudicatory Council yesterday upheld FINRA’s 2006 decision to fine American Funds Distributors $5 million for directing traders—worth $98 million in brokerage commissions—between 2001-2003 to 46 broker/dealers that sold its family of 29 mutual funds.

WASHINGTON - The Office of the Comptroller of the Currency's $144 million enforcement order against Wachovia Corp. is likely to force banks to step up oversight of telemarketing customers.