Regulation

After a day's worth of discussion among industry executives, regulators, academics and investor advocates about the utility and future of 12b-1 fees, one theme emerged: something should be done.

Despite the hurly-burly set off by Securities and Exchange Commission Chairman Christopher Cox's request that Congress eliminate soft-dollar safe harbors, industry insiders argue that such a change will result in nothing but toil and trouble for retail investors.

The NASD collected roughly half the amount of fines in 2006 compared to 2005, taking in $84.9 million in 2006, compared to $134.3 million in 2005, according to its annual report. The NASD issued another $75 million in fines in 2006, compared to $148.5 million in 2005.

Regulation continues to weigh on fund executives' minds as their number-one concern, according to a PricewaterhouseCoopers survey of 400 senior finance executives at a forum last month.

The Securities and Exchange Commission announced that BISYS Group is paying $25 million in disgorgement and interest to settle charges of violating financial reporting, books and records and internal control provisions of the Securities Exchange Act of 1934.

Especially now that the news has leaked that hedge fund managers are raking in incredible salaries-some making more than $1 billion a year-Congress is undoubtedly going to be taking a serious look at increasing regulation of hedge funds, according to a number of reports. And that has many hedge fund managers stepping up their political contributions, hiring lobbyists and, in some cases, forming their own political action committees, according to The Economic Times.

The NASD fined two Fidelity Investments broker/dealers-Fidelity Investments Institutional Services Co. and Fidelity Distributors Corp.-$400,000 for distributing misleading performance information about investment plans sold primarily to military personnel.

How many regulators does it take to develop a clear, easy-to-read privacy notice?

A Kentucky lawsuit decided in early 2006, and a similar tax case now being tried in North Carolina, could spell the demise of single-state municipal bond funds as we know them.

NEW YORK-Fund companies can anticipate fewer lawsuits from shareholders over what they claim are excessive fees, according to panelists at the Practising Law Institute's "Investment Management Institute 2007" here.