Special Program Root Tag

The Securities and Exchange Commission announced Wednesday that BISYS 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.

Hedge funds are finding out it’s hard to be all things to all people, as they have been reducing their risk exposure in an attempt to appeal to conservative pension plans, yet disappointing other investors looking for astronomical returns, BusinessWeek reports.

Investors in mutual funds in Europe are not of a single mind, the Financial Times reports. While the U.K., France and most of the nations in Eastern Europe are doing a brisk business, outflows are strong in Italy, Germany and Switzerland.

Mutual funds, pensions and other large shareholders that rely on two large proxy advisory firms, Glass Lewis and Institutional Shareholder Services, are concerned that new ownership at the businesses might be affecting the quality of the advice they impart, The Wall Street Journal reports.

With the prices of U.S. homebuilding stocks falling for the past two years, particularly since the beginning of the year, managers of real estate investment trusts are turning their attention overseas, principally to Japan, Germany and China, Bloomberg reports. The Standard & Poor’s 500 Real Estate Index is down 16% since Feb. 7 and the 16 homebuilders in various S&P indexes declined 44% since July 20, 2005.

The Supreme Court said it will hear a case in its next term this fall that could drastically impact both the municipal bond market and 529 college savings plans, law.com reports. At issue is whether states can exempt municipal bonds issued in their own state from taxes yet levy taxes on municipal bonds issued by other states.

Merrill Lynch will acquire a minority stake in GSO Capital Partners, an $8 billion hedge fund run by Bennett Goodman. It is Merrill’s second investment in a hedge fund in the past eight months.

Many mutual funds are investing heavily in stocks outside of the U.S., Bloomberg reports. Funds at BlackRock, Goldman Sachs and Waddell & Reed Financial, in particular, are loading up on global stocks.

Investors in China continue to pour money into the stock market, disregarding warnings from securities regulators that the market may be overheated, the Associated Press reports. With the Shanghai Composite Index more than double what it was a year ago, investors opened 8.56 million new equity accounts in the first quarter of the year, compared with 5.38 million in all of 2006. Publicly traded companies’ earnings grew 44% in 2006 and the economy expanded 11% in the first quarter.

As the $144.5 billion playing field for target-date, or lifecycle, funds continues to get more and more crowded-last year fund companies introduced 302 target-date funds and assets soared 61%-the funds are diversifying their holdings to distinguish themselves. Others are extending their equity exposure with the goal of equipping longer-living retirees with enough money to last throughout their lifetimes.

In its monthly survey of fund managers, interviewing 201 investors overseeing $586 billion in May, Merrill Lynch found that they are less concerned about corporate profits, The Wall Street Journal reports.

The G8 code of conduct for the hedge fund industry might be releases “in the nest few months,” German Finance Minister Peer Steinbrueck said, according to Agence France Press. “I think that’s possible,” he said before a meeting with G8 finance ministers of Britain, Canada, France, Italy, Japan, the U.S. and Russia.

The wealthiest man in Asia, Li Ka-Shing, is skittish about China’s markets, according to Bloomberg News. Last week, Li said that China’s stocks “must be a bubble.”“As a Chinese, I’m worried about the stock market in China,” the Hong Kong entrepreneur said.

Many Wall Street experts have predicted that eventually the industry is headed for a financial meltdown, and Richard Bookstaber, who has spent his career designing derivatives, working on the street and running a hedge fund believes the same as well, according to The Wall Street Journal.“The financial markets that we have constructed are now so complex, and the speed of transactions so fast that apparently isolated actions and even minor events can have catastrophic consequences,” Bookstaber wrote in this new book, “A Demon of Our Own Design: Markets, Hedge Funds and the Perils of Financial Innovation.”

A Department of Labor proposal brought to the table last year is still in discussion about whether or not to include lower-yielding insurance products in default investment options for 401(k) plans, according to Dow Jones.Congress directed the Labor Department to make it easy for investors to be automatically enrolled in work-based retirement saving plans. The Pension Protection Act called for the rule to be made effective by February.

Researchers affiliated with the Stanford Graduate School of Business say that while mutual funds take proxy votes for boards of directors seriously, they also want to be in line with other funds they compete with.

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.

WASHINGTON-Investment companies interested in capturing more market share should not worry so much about new products, such as separately managed accounts, exchange-traded funds, or even funds mimicking alternative investments.

WASHINGTON-While fund companies do a good job of focusing on investor needs and expectations, to best help clients prepare for retirement, they need to first understand investor behavior, according to panelists at the Investment Company's Institute's 49th Annual General Membership Meeting here this month.

Registered investment advisory firm Legend Advisory Corp. of Palm Beach Gardens, Fla., believes it has found the secret to successful investing through the use of predictive asset allocation. The firm's executives claim to be the first to apply so-called artificial intelligence to broad global asset classes to allow the firm to predict, four months in advance, which of seven classes will show the strongest performance.