Regulation

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.

At the Securities and Exchange Commission's meeting on April 17 and 18 in Washington, D.C., open only to chief compliance officers, SEC chief examiner Gene Gohlke announced that mutual funds can now add forensic testing to their SEC exam checklist of funds' own annual internal compliance reviews.

NEW YORK - As the world economy becomes increasingly connected, communicating important financial information, such as income statements, cash flow, balance sheets and mutual fund returns, would be all but impossible without a common language.

The Securities and Exchange Commission has announced the distribution of $30.6 million to more than 250,000 investors affected by market timing by RS Investments.

WASHINGTON—Treasury Secretary Henry Paulson met in private with top lenders and servicers this week to warn them the housing market is continuing to deteriorate and press them for a new solution, several sources said Thursday.