Regulation

MFS Investment Management has hired a new chief counsel and a compliance officer to oversee corporate governance and compliance procedures in the wake of its $350 million settlement with regulators last month.

NEW YORK -- Soft dollars and directed brokerage are appalling and must be eliminated. That's the tune we've been hearing almost uninterrupted for the last several months as regulators and lawmakers have unleashed the hounds on the fund industry. But not all are on board with the efforts to kill the practices.

Bank of America, the nation's third-largest bank, was slapped with a record $10 million fine last week for failing to comply with regulators' repeated requests for information during their probe of improper trading practices.

The National Association of Securities Dealers has slapped its first fine on a brokerage firm for violating NAV transfer program procedures.

Putnam Investments took the initial hit from the rash of sales and marketing executives defecting to Liberty Financial in the late 1990s, but it is Columbia, which since consumed Liberty, that is now poised to take a beating from the transaction.

The House Financial Services Committee passed The Securities Fraud Deterrence and Investor Restitution Act (H.R. 2179), which would permit the SEC to more easily collect fines and funds from those who have broken the law. It would also increase the amount of funds the SEC would be able to return to injured investors.

The number of mutual funds lowering fund-management fees is proliferating, and as the mutual fund scandal continues to unfold, this trend should spread, according to industry analysts.

Regulators are not just targeting those in cahoots with market timers. Now, any firm that failed to do enough to keep the wolves out of the pen is fair game.

The SEC's top regulators have chastised mutual funds. State regulators have fired harsh salvos at them. And to put it quite mildly, the national press has gone to town.

Canadian Imperial Bank of Commerce announced last Monday that it would pour $37 million to reform and educate employees on corporate governance. The funding is, in part, forced by a December settlement with federal regulators stemming from its links to the blown-up accounting practices at Enron.