Regulation

Four fund firms that manage closed-end funds were sanctioned and fined a collective $1.7 million on Sept. 28 by the Securities and Exchange Commission for not properly disclosing the true nature of shareholder distributions made under their fund's managed distribution plans.

Fines, being barred from the industry and even facing years behind bars evidently won't deter some market timers looking for a quick, sure buck.

The President's Working Group on Financial Markets will form two private-sector groups to develop best practices for the hedge fund industry, and while it comes far short of requiring hedge funds to register with the Securities and Exchange Commission, this is welcome news, both for investors and the market.

The Securities and Exchange Commission has charged five former portfolio managers of two registered investment advisory firms, LP Advisors and Freedom Capital, with allowing hedge fund clients to late trade mutual funds in 2002 and 2003. The five are David Byck, William Cole, Charles Irwin, Michael Price and Jay Sumner.

The President's Working Group on Financial Markets will form two private-sector groups to develop best practices for the hedge fund industry, and while it comes far short of requiring hedge funds to register with the Securities and Exchange Commission, this is welcome news, both for investors and the market.

Of the 14 regulations that came out of the mutual fund trading scandal, the two most important were the creation of a chief compliance officer and the requirement that three-quarters of a fund's board of directors, including its chairman, be independent.

Four years after securities regulators sued five former brokers at Prudential Securities for extensive improper mutual fund trading, Justin Ficken, never considered the most notorious trader in the scandal, is facing the largest monetary penalty out of everyone, according to the Newark Star-Ledger.

The Securities and Exchange Commission has revised its examination hotline system, at 202-551-EXAM, following a 38-page Government Accountability Office study analyzing its examination procedures.

Of the 14 regulations that came out of the mutual fund trading scandal, the two most important were the creation of a chief compliance officer and the requirement that three-quarters of a fund's board of directors, including its chairman, be independent.

Full-page newspaper ads or mailed invitations hyping financial seminars for seniors often are dubbed "educational" and "workshops."