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Marsh & McLennan agreed to an $850 million settlement with New York Attorney General Eliot Spitzer to resolve allegations that the firm participated in a widespread insurance scam that involved rigging bids and paying off brokers, Spitzer's office announced Monday.

The Strong Funds moniker will soon be added to the scrap heap of discarded financial service firm brands next quarter after Wells Fargo fully incorporates the assets it acquired last year from Strong Financial Corp. Wells Fargo officials are now working to integrate the Strong Funds into a proprietary family that will soon be known as Wells Fargo Advantage funds. The combined family will boast roughly 120 funds and $100 billion of assets.

A mutual fund that pays a brokerage firm to be on the firm's preferred group of investments list may receive up to 10 times the amount of money as a fund not listed with the brokerage firm, according to new research from Cerulli Associates.

Fund-tracking firm Morningstar has launched a set of Internet-based applications to help advisers at brokerage firms comply with federal regulations requiring them to inform clients of mutual fund breakpoint discounts on front-end sales loads.

Federated Investors announced last week that it is engaged in talks with state and federal regulators to resolve previously reported trading abuses at its fund unit and that two of its officers could face enforcement actions.

Janus Capital confirmed last week that its trustees have approved a new compensation plan that ties portfolio manager pay more closely to the performance of its mutual funds, advancing the interests of its shareholders and providing further proof of its nascent recovery.

A position once delegated to shuffling papers and answering telephones, the internal wholesaler is taking on greater significance as mutual fund companies search for ways to cut costs, streamline distribution and enhance service for their selling partners. Still, there is a delicate balance between dedicating additional internal resources and maintaining the personal client relations that only an external wholesaler can provide.

Independent directors who are required to head mutual fund boards by 2006 must have enough authority to perform their duties by pushing back against management, according to a newly released report commissioned by an industry trade group affiliated with the Investment Company Institute.

Massachusetts Secretary of the Commonwealth William Galvin has subpoenaed Morgan Stanley and other brokerage firms to find out whether they disclosed to investors payments they received from insurance firms to sell their variable annuities.

Some institutional pension plan sponsors, including Coca-Cola, have reportedly walked away from Fidelity Investments after the mutual fund giant implemented stringent short-term trading penalties to deter market timers. Vanguard also blocked access to Fidelity funds offered in some of its retirement plans because of the redemption fees.

PFPC Worldwide Promotes COO Wynne to President

A lackluster December in mutual fund sales closed the curtain on a year that wasn't overly dramatic for the industry, according to fund tracker Lipper of New York. While the S&P 500 rallied by 3.4% in the final month to help deliver a solid, 11.5% gain for the average domestic equity fund in 2004, fund flows sputtered in December as investors turned their attention to the holidays.

By making it easier for investors to roll over assets from qualified employee benefit plans to IRAs, two service providers are giving financial service providers a better shot at capturing those often elusive assets.

Alarm bells are going off in the Chinese mutual fund industry, which posted a collective $489 million net loss in the second half of 2004, Reuters reports. China's nine-month stock slump, fierce competition and a lack of derivatives to hedge investments contributed to a gloomy outlook for two-thirds of the country's 153 mutual funds.

The loosely regulated hedge fund industry posted a 19% gain last year, attracting $73.6 billion in new assets, according to data released by Hedge Fund Research Inc.

Investment manager Waddell & Reed Financial reported a slight drop in quarterly earnings, citing higher compensation and distribution expenses.

Advisers for President Bush decided late last week upon a proposal for restructuring the private accounts his administration wants to create in Social Security, but it's likely that Wall Street's profits from such a plan will be thin.

Variable annuities have again come under fire, this time through a pair of class-action lawsuits led by Finkelstein & Krinsk, one targeting Linsco/Private Ledger Corp. and the other targeting Morgan Stanley. In statements, Finkelstein & Krinsk claims that both firms "made false and misleading statements and omitted material facts concerning their undisclosed financial interests with third-party suppliers of annuity contracts," the firm stated.

Diversified Management Resources, a mutual strategic consulting and executive recruiting firm that has partnered with NICSA and others, has launched a brief survey on one controversial aspect of new regulations: the independent chairman rule. The survey is intended to gather information so that DMR can provide the fund industry with a comprehensive look at fund directors' perspectives on governance issues and regulations.

European sales of retail mutual funds for Merrill Lynch Investment Managers (MLIM) have topped institutional fund sales for the first time, according to the company's earnings report for the fourth quarter of 2004.