Regulation

Shareholders in a number of large Fidelity mutual funds, most notably the $73 billion Contrafund, succeeded in forcing a proxy vote that will take place later today on whether the company should institute a “genocide-free” investment policy, the Associated Press reports. The unbinding measure is unlikely to pass, however.

The Securities and Exchange Commission recently suspended and fined two brokers with Wachovia Securities $250,000 each for their roles in a market-timing scheme that cost mutual fund shareholders hundreds of thousands of dollars in losses, writes The Miami Herald.Thomas C. Bridge, 41, of Fort Lauderdale and James D. Edge, 46, of Lake Worth, both worked at Wachovia's Boca Raton office. Edge was Bridge's supervisor.According to Judge Brenda Murray, Bridge engaged in numerous market timing trades, prompting complaints from mutual fund companies. Instead of stopping Bridge, Edge helped him circumvent trading restrictions, including the use of multiple account numbers and broker ID numbers to hide transactions.Bridge has been suspended for a year and Edge has been suspended for 30 days, with the stipulation that he never be a supervisor again.The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

A federal judge in Pennsylvania has given final approval to a $14 million settlement against New York Life Insurance Co. by employees who said the company’s retirement plans were improperly invested into mutual funds owned by New York Life.

A proposal by the Securities and Exchange Commission to shorten mutual fund disclosure statements is meeting widespread support, and a new rule could take effect by 2009, if not sooner.

The British government is considering an overhaul of their tax code for mutual funds that could put the responsibility for declaring income from funds directly on investors, according to foreign news reports.

The bonuses and pay packages of the chief executives at Countrywide Financial Corp., Citigroup Inc., and Merrill Lynch & Co. were not made in the interest of the companies’ shareholders, particularly as the subprime crises was unfolding, according to a report from a U.S. House committee.

The Securities and Exchange Commission has filed an order against a top advisor at Fidelity Investments, after a four-year investigation into the inappropriate use of gifts and the entertainment of prospective clients.

As part of a settlement with New York Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac will establish a home appraisal watchdog organization to help prevent fraud in valuing homes, Reuters reports.

WASHINGTON - House Financial Services Committee Chairman Barney Frank is preparing a $35 billion housing package that would expand the government's role in combating the sub-prime mortgage crisis.

After years on the back burner, the Securities and Exchange Commission's rule governing mutual fund marketing fees is in store for a "complete overhaul," according to commission chairman Christopher Cox.