Special Program Root Tag

Although the Pension Protection Act permits 401(k) fund administrators to give advice to participants as long as fees collected from the advice remain constant, no matter what the investment choice, it doesn’t address the problems that arise when the advice steers investors into funds run by the 401(k) administrator itself, The Wall Street Journal reports.

New launches of exchange-traded funds at Vanguard and the hiring of more wholehave created excitement for the products among investors, and that is the primary reason the funds have taken in $15.1 billion in inflows so far this year, compared to flows of $8.6 billion the year prior, Thomas Rampulla, director of sales in the financial advisory business, told Reuters.

Although the sell side in the financial services industry has virtually halted all of its recruiting efforts due to the subprime crisis, the buy side is aggressively hiring, in anticipation of the oncoming wave of retiring Baby Boomers and the increasing internationalization of the markets, according to Russell Reynolds.

AXA Equitable Life’s 800-pound gorilla is flexing his marketing muscles again.

There are rumblings, once again, over the possibility of creating the first actively managed exchange-traded fund.

With New York regulators investigating 30 hedge funds for potential conflicts of interest and insider trading, California attempting to require them to register and the credit markets threatening to wreak havoc on them, hedge fund executives are bracing for a wave of action against them in 2008, The National Law Journal reports.

A U.S. Supreme Court case of a 401(k) investor from Dallas who claimed his employer failed to execute an order, costing him $150,000, may pave the way for lawsuits by individual investors, rather than class-action suits.

Shakeouts at State Street Global Advisors and Bank of America's Columbia Management unit may be just the tip of the iceberg, as repercussions from the credit crunch hit mutual fund staffing levels.

Doomsayers and recession forecasters aside, two recent studies that advocate investments in large-cap growth equities say U.S. economic problems will be largely confined to the housing sector and some parts of the financial arena.

Emerging markets have become the new hot spot for mutual fund companies and investors looking to diversify their portfolios internationally, but analysts say even countries like China may be too correlated to the U.S. economy to escape a global recession-prompting some to look further, to new frontiers.

Forget the hoopla over exchange-traded and emerging markets funds. If there's one new, significant development in the world that the U.S. mutual fund industry should take advantage of through the launch of new funds, it's the increasing worry over global warming.

SEC Names Osterman Associate Director of Investment Management

SEC Permits Companies to Bar Ballot Nominations

More than half of mutual fund investors don't know the difference between a mutual fund and an exchange-traded fund, but a recent survey found that many investors are interested in learning more about them and would consider buying ETFs if their financial adviser suggested it.

Citadel Investment Group gave a lifeline to troubled discount broker E-Trade Financial on Thursday with a $2.5 billion capital infusion, according to the Associated Press.

Investment bank Bear Stearns will lay off 4% of its staff due to continuing fallout from the summer subprime mortgage crisis, the Associated Press reports.

The Securities and Exchange Commission has announced that Deputy Enforcement Director Peter Bresnan will leave his post Dec. 5 to become a partner with Simpson Thacher & Bartlett.

Bill Gross, chief investment officer at Pimco, said the effects of the subprime crisis have yet to be felt—and they will be devastating, the Financial Times reports.

The Financial Industry Regulatory Authority has fined brokerage Rafferty Capital Markets more than $400,000 for failing to prevent its hedge fund clients from late trading and market timing mutual funds between January 2001 and August 2003. The fine is $350,000, along with $59,605 that Rafferty must repay to two mutual fund families. In addition, FINRA said, Rafferty helped the hedge fund clients escape detection by opening multiple customer accounts and different brokerage branch codes.

On Thursday, the Securities and Exchange Commission issued a sample format for the mutual fund prospectus profile it has proposed requiring fund companies to send to investors. The three- or four-page document would be in the front of every prospectus. In addition, fund companies would have the option of sending the shorter form to investors and making the longer version available on their website or in hard copy, upon an investor’s request.