Special Program Root Tag

The NASD intensified its regulatory focus on sales of mutual funds, variable annuities and 529 college savings plans in 2005, and did so by increasing its enforcement actions. In 2005 the NASD set records as 1,412 enforcement actions were brought forth, 1,296 of which were resolved. Of the enforcement actions brought forth this year, 400 were mutual fund-related.

While it still trails market share leaders Barclays, State Street and Vanguard Group in terms of assets under management, PowerShares Capital Management made a great deal of noise in the exchange-traded funds sector this year; but experts are unsure whether the Wheaton, Ill.-based group can build upon its frenetic product push.

After 11 years of working as a staff attorney in the Securities and Exchange Commission's division of enforcement, Lawrence A. West, associate director of the division, is stepping down to become a partner with Latham & Watkins.

As of mid-January, Abigail Johnson will no longer serve on the board of trustees overseeing the mutual funds at Fidelity Investments, the company confirmed last week. Johnson is relinquishing her responsibilities merely as a result of shifting from head of the fund unit to running the retirement services division, a company spokeswoman told The Boston Globe.

David Rocker, of Rocker Partners LP, owns a hedge fund that is boasting 50% returns, impressive when compared to the industrywide average of 7%, according to The Wall Street Journal.

Despite the unpredictable market and increasingly demanding investors, 955 new equity portfolios, were launched in 2005, The Wall Street Journal reports. These included 232 multi-cap core funds, 79 balanced funds, 70 income funds, 64 flexible portfolios, 41 large-cap growth funds, 21 real-estate funds, 14 tech funds, 10 natural resources and nine each for natural resources, health and biotechnology.

Mutual fund expenses are at the top of the Securities and Exchange Commission's list for inspection priorities, according to Compliance Reporter.

U.S. Wealth Management has announced that it has launched a new broker/dealer firm, which will be called U.S. Wealth Advisors. The move was an effort to better service their growing client base.

The independent trustees of Fidelity Investments have named Robert M. Gates as their new chairman, according to The Boston Globe.

First Tennessee Bank, a division of First Horizon National, will merge its $1.4 billion First Funds family of eight mutual funds into Goldman Sachs's $532 billion stable of 35 funds, the companies announced late last week.

The Securities and Exchange Commission is suing the former executives of National Century Financial Enterprises for allegedly defrauding investors who bought shares of the company's securities prior to its collapse back in 2002, the Associated Press reports.

The Securities and Exchange Commission filed a civil suit late last week with the United States District Court for the Northern District of California against two hedge fund traders, Brent Federighi and Michael Hoffman, for allegedly placing more than 3,000 late trades.

Stull, Stull & Brody of New York has filed a class-action lawsuit with the U.S. District Court for the Northern District of California against Wells Fargo & Co. and its H.D. Vest Investment Services subsidiary on behalf of shareholders in Federated mutual funds.Although the suit charges that Wells Fargo had special shelf-space agreements with 19 mutual fund companies and that H.D. Vest has such agreements with 12 fund companies, it is only on behalf of investors in Federated funds.The suit charges that between June 20, 2000 and June 8, 2005, investors in those funds were steered to invest in the preferred fund families by the two firms and their brokers, who received shelf-space payments in exchange for promoting those funds, but failed to tell their clients of this potential conflict of interest. Thus, the lawsuit accuses the firm of violating federal securities laws.

Continuing a trend begun in the second half of the year, world equity funds beat out all other specialty equity sectors as the best-performing funds of 2005, Forbes reports.

Mutual fund managers have been predicting and hoping for a pick up in the growth arena for more than a year now, and finally, in 2005, growth funds are beating value, and fund managers are arguing that this new trend will continue well into 2006, according to Business Week Online."Our bet right now is on growth stocks," says Gina Sanchez, manager of the American Century Investments' Strategic Asset Allocation Funds.

In a regulatory statement, this Wednesday, Alger Funds announced that its manager received a Wells notice from the Securities and Exchange Commission on Dec. 16, 2005 for investigations having to do with fund market timing and late trading, according to MarketWatch.com.A Wells notice allows individuals to come clean in regards to accusations, before the SEC formally brings charges forth.

Brokerage industry regulator NASD has fined hedge fund manager John Mangan Jr. $125,000 on charges that he improperly traded restricted, unregistered shares, according to The New York Times.

Fidelity Investments has added two new enhancements to its Charitable Gift Fund investment pool program that are designed to provide contributors with greater diversification opportunities when they spend their charitable dollars.

London-based Old Mutual, South Africa 's largest insurer and an international asset manager, has successfully taken control of Skandia, a Swedish insurer, for $3.7 billion.

So exactly what sort of workload can the average chairman of a fund complex handle? Evidently, quite a substantial one, according to a report from The Rocky Mountain News.