Special Program Root Tag

Columbia Management, Bank of America's investment management arm, has hired Frederick Copper to be head of its international equities team.

Brian Posner, a well-known former manager at Fidelity Investments, has been selected to head the stock-mutual fund group that Legg Mason will acquire as a result of its asset swap with Citigroup, The Wall Street Journal reports.

Lawyers and investigators predict that due to the recent hedge fund scandals, most recently the collapse of Bayou Management and the suspected fraud at Wood River Capital Management, investors are more likely to take precaution before entering into the industry, Reuters reports.

Charles Schwab announced Thursday that its funds are now being made available to third parties through clearinghouses and brokers outside of the company.

L. Douglas Schmidt, the former chief operating officer of hedge fund Durus Capital Management, pleaded guilty Wednesday in U.S. District Court in Bridgeport, Conn., to charges that he manipulated two stocks, which led to a profit of $40 million for Durus, The Wall Street Journal reports. Schmidt also admitted responsibility for filing false statements with the Securities and Exchange Commission,

Standard and Poor's has introduced new "style" and "pure style" indexes to provide investors with a better look at true growth and true value stocks, but the differentiation - which will soon be available through index, exchange-traded and mutual funds - may be lost on the average investor, The Wall Street Journal reports.

The U.S. Attorney's Office for the Southern District of New York charged Refco CEO Phillip R. Bennett Wednesday with securities fraud, and charges from the Securities and Exchange Commission were also said to be pending against the nation's ninth-largest futures brokerage firm.

The Securities and Exchange Commission and the New York Stock Exchange have alerted A.G. Edwards Inc. they intend to impose disciplinary action against the firm, A.G. Edwards indicated in an SEC filing. The SEC has issued a "Wells Notice" telling the brokerage firm it is likely to bring a civil injunctive action against the firm for allowing clients to market time mutual funds prior to October 2003.

The Securities and Exchange Commission and the New York Stock Exchange have alerted A.G. Edwards Inc. they intend to impose disciplinary action against the firm, A.G. Edwards indicated in an SEC filing. The SEC has issued a "Wells Notice" telling the brokerage firm it is likely to bring a civil injunctive action against the firm for allowing clients to market time mutual funds prior to October 2003.

Theodore C. Sihpol III, a former broker with Bank of America Corp., is about to reach a settlement with the Securities and Exchange Commission for permitting hedge fund Canary Capital Parners to conduct improper mutual fund trades, and it is likely to include a fine and a banishment from the securities industry, people familiar with the matter said. The SEC originally brought its charges against Sihpol two years ago.

The Investment Company Institute has selected Martin L. Flanagan, president and CEO of AMVESCAP, as chairman of the institute for one year, replacing James S. Riepe, who will continue to serve as vice chairman of ICI.

Theodore Sihpol III settled with the Securities and Exchange Commission Wednesday for a $200,000 fine and a five-year ban from the securities industry. While he neither admitted nor denied the charges and still faces civil charges, the settlement, as some observers had expected, bought him leniency from New York Attorney General Eliot Spitzer, who dropped the final four criminal charges against the former Bank of America broker.

With funding of public pension plans generally improving, primarily due to equity markets bouncing back, their interest in hedge funds is waning, HedgeWorld.com reports. A recent Wilshire Consulting study of assets and liabilities of 104 city and county retirement systems, uncovered that pension plan funding has improved much since 2002.

Bruce Norgren, CCO, and Michael Novak, chief legal counsel, have both departed Manulife Securities International, for reasons having to do with the recent allegations brought forth by the Ontario Securities Commission against collapse hedge fund Portus Alternative Asset Management, The Globe and Mail reports. Manulife had a referral agreement with the C$800 million hedge fund.

According to Hennessee Group LLC, September proved to be a strong month for hedge funds. The funds' performance rose by 1.7%, a higher growth than equity and bond markets, The Wall Street Journal reports. During the month, the Standard & Poor's 500 stock index rose 0.69% and the Dow Jones Industrial Average 0.83%.

Shares of publicly traded mutual fund companies rose an average of 6.6% in the first nine months of the year, as opposed to 2.8% for the S&P 500, and one high-profile analyst expects firms to report strong earnings for the third quarter, MarketWatch reports.

The NASD has fined eight broker/dealers, including one mutual fund distributor, Lord Abbett Distributor, $7.75 million for giving favorable treatment to mutual funds in exchange for earning trading commissions on directed-brokerage business. The sanctions are the latest in what NASD says is an ongoing enforcement sweep to detect violations of its anti-reciprocal rule. In June, NASD fined 15 brokerages, including six subsidiaries of AIG, $34 million for these violations.

In a case that's becoming all-too-familiar in the hedge fund industry, the Ontario Securities Commission is charging the former president of Portus Alternative Management with fraud and destroying documents, but it appears he has fled the country.

Riding the popularity of hedge funds, as well as a flat market, a number of money managers are launching mutual funds that deliver "absolute" returns. If recent history is any indication, however, they're success might be short-lived, a report form The Wall Street Journal reveals.

Skandia Chairman Bernt Magnusson stepped down Friday, saying he did not think it was appropriate for him to continue leading the firm at a time when the majority of the board does not back his belief that selling Skandia to Old Mutual is a smart move.