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Morgan Stanley will pay $17 million to settle charges by the Securities and Exchange Commission that it failed to supervise four former financial advisers accused of market timing and other deceptive trading practices.

Although distressed debt hedge funds have yet to benefit from the credit crisis, they undoubtedly will in the coming year, Reuters reports.

Only months after Bear Stearns Asset Management saw two of its top hedge funds collapse, the investment bank has just announced plans to launch a 130/30 mutual fund product, according to Dow Jones Newswires.

Retirement plan providers looking for communication tools they can provide to 401(k) participants will have a new product available from Broadridge Financial Solutions Inc. The new, retirement plan software allows retirement plan providers to create high-impact presentations for their investors. It can create projections of how much a client’s investment could grow over time through the use of charts, illustrations and other variable content—taking into consideration their holdings, age, compensation and deferral rates. The purpose of the tool is to motivate investors to increase participation and deferral rates, and, as proven by one recent mailing that a 401(k) sponsor created using the Broadridge software that boosted participation in the plan from 62% to 69%, it can have very effective results. “We developed this proprietary, [Internet-based] tool that plan providers can use right from their desktops with minimal effort and upfront cost,” said Gerard Scavelli, president of investor communication solutions at Broadridge. This secure, online solution is available as a stand-alone product and is also designed to integrate seamlessly with Broadridge's dynamic on-demand communications system. Broadridge has more than $2 billion in revenues and more than 40 years of experience as a global provider of technology-based outsourcing solutions to the financial services industry.

Goldman Sachs is preparing to offer a new long-short hedge fund, Goldman Sachs Investment Partners, on Jan. 1 that could raise between $6 billion and $10 billion, Reuters reports.

Louis Navellier, president of Navellier & Associates, recently told MarketWatch that while he believes the market will continue to be rocky in 2008, there will be some “narrow” segments that could deliver strong growth, namely defense, healthcare, natural resources and growth stocks.

The Securities and Exchange Commission and U.S. Attorney General’s Brooklyn office are investigating whether certain insiders at Bear Stearns unloaded shares in two of the firm’s hedge funds that imploded while preventing other investors from redeeming their holdings, by urging them to remain invested despite turmoil in the subprime market, BusinessWeek reports.

The Securities and Exchange Commission has filed a civil against in the United States District Court, Northern District of Florida against Don Warner Reinhard, general partner of hedge fund Magnolia Capital Advisors, for allegedly issuing false and misleading statements to investors as to the actual risk of his collateralized mortgage obligation (CMO) holdings.

Ellyn A. McColgan has landed a job with Morgan Stanley as head of the company’s global wealth management group, with the title of president and chief operating officer. McColgan, 53, comes to Morgan Stanley after a 17-year career at Fidelity Investments, where she recently served at president of distribution and operations. She was widely predicted to succeed Fidelity Chairman Edward C. “Ned” Johnson, but she resigned in August after Johnson recruited Rodger Lawson from Prudential Financial Inc. to take over as president of FMR, Fidelity’s holding company. “Ellyn McColgan is the ideal executive to carry forward the tremendous progress that James Gorman and his team have made in transforming our global wealth management business into an industry leader,” said Morgan Stanley Chairman and CEO John J. Mack. “She will bring to our management committee a breadth and depth of experience that is unmatched in our industry. As the leader over a number of years of one of the largest wealth management businesses in the U.S. , Ellyn has a proven ability to grow revenues and profits, deliver a superior operating platform to financial advisors and create a client experience that is second-to-none.” Mack has been reshuffling executives since Morgan Stanley’s announcement of a $3.7 billion write-down of subprime mortgage assets last month. McColgan will report to Morgan Co-President Gorman beginning in April, and will lead a team of more than 8,300 brokers.

Exchange-traded funds were rare in Asia 10 years ago, but thanks to a better-educated investing public and active campaigns by fund companies, ETFs could soon become as mainstream in those markets as they are in the U.S. , the South China Morning Post reports.

Staffing shortages, investor pressures and new regulations will force mutual funds and hedge funds to embrace automation techniques in order to meet increasing reporting and expense management requirements in the coming year, according to a leading automated data management group.

Two former financial advisers at Morgan Stanley face a complaint by the Securities and Exchange Commission for allegedly using market-timing techniques to generate nearly $1 million in fees, according to Reuters.

The Securities and Exchange Commission’s investigations into market manipulation and insider trading are thwarted by the fact it fails to make use of exchanges’ internal audits and searches through investigative referrals from exchanges cannot be handled easily on its computer systems, according to a report from the Government Accountability Office. Sen. Charles Grassley (R-Iowa), the ranking Republican on the Senate Finance Committee, requested the report following an investigation his office conducted last year into a foiled up SEC investigation into possible insider trading at Pequot Capital Management.

Investment research provider Morningstar Inc. is in the final stages of purchasing Hemscott data, media and investor relations website businesses from Ipreo Holdings for an estimated cost of $51.6 million.

According to a poll of 200 advisers that SEI recently conducted, 42% plan to increase client communications, particularly face time, in 2008, making it their No. 1 priority. Ten percent are considering offering investment education to their clients, not only through individual meetings but also through group seminars.

It wasn't long ago that Eliot Spitzer, reveling in the glory of a national media frenzy for having shaken down Wall Street scams with a power not even the entire Securities and Exchange Commission could muster, hinted he might one day run for president of the United States.

Citigroup Inc. will provide emergency support to seven structured-investment vehicles, adding $49 billion in assets and depleting the financial conglomerate’s capital base, according to the Wall Street Journal.The action could relieve the growing anxiety in credit markets that SIVs could be forced into selling assets at reduced prices, but increases pressure on Citigroup, which is facing massive losses after this summer’s global credit crunch.

Total assets for money market mutual funds rose by $4.39 billion to $3.122 trillion in the latest week, according to the Investment Company Institute.

The Investment Company Institute said it welcomes the Department of Labor’s proposed rule to improve disclosure of 401(k) and other employee benefit plans to fiduciaries.

The Financial Industry Regulatory Authority’s free, online service BrokerCheck, which tracks more than 670,000 securities professionals, has come under criticism for the number of customer complaints it erases, according to the New York Times.