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Bear Stearns must pay nearly $160 million to investors in a hedge fund for failing to properly supervise the activities of the fund before it collapsed in 2000, according to The New York Times. The case involved Manhattan Investment Fund and its Austrian-born manager Michael Berger. Four hundred million dollars of investors’ money was lost by making bad bets on Internet stocks during the technology boom of the late 1990s. The year before the fund collapsed, suspicions grew among executives at Bear Stearns, which was the fund’s prime broker, that Berger was providing fake account statements to investors. Berger transferred $141.4 million to the fund’s account at Bear Stearns to meet increased margin requirements and continue selling stocks short, betting that they would decline in value, court filings state. A federal bankruptcy judge ordered $121.1 million of the transferred payments be returned to investors with interest. Judge Burton R. Lifland, in an opinion issued last month, said that Bear Stearns, which made $2.4 million in profits from executing transactions for the funds, “failed to act diligently in a timely manner,” noting that individuals inside the investment bank may have been aware of the fraud dating back to 1998. “We are disappointed with the bankruptcy’s court’s decision, and believe that it is not supported by either the law or the fact’s,” Bear Stearns said in a statement. The investment bank plans to appeal the decision. The judge’s decision surprised many on Wall Street, who said that if it stands on appeal, prime brokers may no longer be able to argue they have a hands-off business of simply executing trades for funds. Some said that Wall Street firms may need to strengthen their market surveillance programs to catch odd transactions or false statements. The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

The NASD has fined AllianceBernstein, Putnam Investments and DWS Scudder a total of $700,000 for improperly paying for entertainment and guest expenses at training and education meetings.

As the so-called "PowerBoomers" approach retirement, a surge of assets will begin leaving retirement plans and flowing into the open market.

Despite growing popularity and public awareness, exchange-traded funds still struggle to get onto 401(k) and other retirement plan platforms.

Hedge funds are viewed as high-risk investments and the average investor tends to shy away from them. But they can complement and offer diversification in an investor's portfolio, according to a recent Lipper "Research Series" report, "The Role of Hedge Funds and Hedge Fund Like-Mutual Funds in a Portfolio."

The U.S. Chamber of Commerce has petitioned the Securities and Exchange Commission to provide it, under the Freedom of Information Act, with details about how it conducted studies into the costs of implementing the independent directors rule. The SEC first published the two economic analyses on the proposed rule in December.

Four men pled guilty earlier this month to opening a hedge fund based sheerly on information gathered from illegal, insider-trading tips.

John Hancock Reassigns Financial Fund Skippers

Now that the Securities and Exchange Commission's Rule 22c-2 has been finalized, mutual fund companies of all sizes are putting plans in place to potentially deal with the receipt and management of detailed shareholder transaction information from financial intermediaries selling their funds.

The decade-long effort to make aggregation portals a viable and valuable business-building tool for advisers, broker/dealers and other financial intermediaries has reached a crossroads. Today, portals provide a single access point for intermediaries with fully electronic account aggregation, research services, select transaction capabilities and access to the websites of participating mutual fund companies. Yet this is only the beginning: The next generation of portals is on its way, and it promises to enhance how intermediaries run their businesses.

Successful mutual fund service organizations realize that behind every transaction is a customer-a person with various commitments and interests, places to be and things to worry about.

How do you boost your endurance for the grand IRA rollover marathon anticipated in the years ahead?

Putnam Investments is consolidating five closed-end funds this year, which will likely reduce fund expenses.

Americans are mostly investing their 401 (k) plans in equities, either through mutual funds or company stock, according to data from the Employee Benefit Research Institute. Sixty-eight percent of 401(k) participants placed their plans in equity securities in 2005, which has changed little in recent years, the report states.

More registered investment advisers are starting to place client assets in alternative investments, according to Rydex AdvisorBenchmarking.

Employers and employees are out of synch when it comes to that’s most important in the workplace, according to the 13th annual Top Five Total Rewards Priorities Survey published by Deloitte Consulting.

John Gaine, president of the Managed Funds Association, said the current regulatory environment concerning hedge funds is “calm,” Dow Jones reports. But he warned attendees at the MFA Network 2007 Conference in Key Biscayne, Fla., recently that one misstep, and the industry could face a rash of new rules.

One of the little-publicized proposals of President Bush’s 2008 Budget Proposal could give a boost to companies marketing 529 college savings plans, according to the San Francisco Chronicle.

Pioneer Investments announced Wednesday that it has named Daniel Keith Kingsbury president and CEO of Pioneer Investment Management USA. Kingsbury had been chief executive officer of the new markets division of Pioneer, where he oversaw business in Central Europe and Asian. During his tenure, the division was the company’s fastest-growing division, with assets multiplying 23-fold from $470 million in 2000 to $10.9 billion today and the countries where it does business expanding from two—Poland and the Szech Republic—to more than 10.

Charles Schwab has unveiled a new online application process for opening and funding an individual retirement account designed to take no more than 15 minutes, the company announced.