Special Program Root Tag

Officials at the Bank of New York in an SEC filing disclosed that regulators are examining mutual fund trades executed by its Pershing unit for possible market-timing violations

With its revenue falling 94% in the third quarter, Marsh & McLennan announced Tuesday that it will lay off 3,000 people, or 5% of its workforce, including roughly 750 people at Putnam Investments and Mercer, its human resources consulting unit.

Brokerage firms that lend stocks to hedge funds and wealthy investors for the practice of shorting often borrow those stocks from mutual funds, earning the funds hundreds of millions of dollars in hefty fees each year. Now, the Securities and Exchange Commission wants to know whether the fund companies are plowing those fees back into the fund assets or retaining some or all of them as profits, TheStreet.com reports.

A report that Janus Capital Group hemorrhaged an additional $900 million in net outflows during October has reinforced fears that the mutual fund giant is on a very slow road to recovery from recent problems with securities regulators.

Although the Securities and Exchange Commission has indicated it would have solutions to eradicate market timing and late trading before the year is up, the Commission is still looking at alternatives to the hard 4 p.m. close and 2% redemption fees on shares redeemed within five days. The SEC is also still looking at how to improve point-of-sale disclosure on commissions and other fees on broker-sold funds.

ORLAND, Fla. – Speaking at the 2004 Operations Conference and Service Provider Exhibition here, Investment Company Institute President Paul Schott Stevens stressed the importance of working together to redefine the culture of the mutual fund business in the wake of the largest scandal in its history.

Assets under management in separately managed accounts jumped 1.2% in the third quarter, according to figures released Monday by the industry’s top lobbyist association.

Al Gore, who served for eight years as Bill Clinton’s vice president and narrowly lost the disputed presidential election of 2000, is launching a new type of socially responsible mutual fund, Financial Times reports.

Legg Mason Inc. charged itself $1.2 million in the third quarter in anticipation of settlement costs stemming from negotiations with the Securities and Exchange Commission over improper mutual fund trades, a company filing with the Commission shows.

The Securities and Exchange Commission is reportedly considering shifting some of its responsibilities to the states, as the agency expects a surge of up to 15% in the number of investment advisors it oversees once the new hedge fund registration requirements become effective in February 2006.

Hedge fund Beacon Hill Asset Management and four of its top executives have settled with the Securities and Exchange Commission for $4.4 million stemming from fraud charges. In addition, the four executives have been barred from the investment advisory business. The principals -- President John Barry, CIO Thomas Daniels, Senior Portfolio Manager John Irwin and Chief Financial Officer Mark Miszkiewicz -- will pay, respectively, $1.2 million, $1.5 million, $750,000 and $400,000. Only Miszkiewicz will have the opportunity to ever be reinstated into the business, but he will not be allowed to reapply for four years.

Securities and Exchange Commission examiners are reportedly finding instances of fund managers intentionally mispricing junk bond and small-cap stock mutual fund holdings and may soon take action.

The wait is over. The presidential election is complete, and with fears of a repeat of the Gore-Bush 2000 fiasco quashed, the market rallied with the definitive outcome.

Market-timing woes continue to pervade the mutual fund industry, as even smaller shops are getting caught in the act.

Exchange-traded funds (ETFs) are definitely gaining wider appeal. But financial service providers, once happy to welcome predominantly institutional investors to these products, are now busily focusing efforts to entice long-term investors.

To prove to its investors that it is working tirelessly to regain a once solid reputation, Putnam Investments has begun to disclose to the Securities and Exchange Commission how much money its fund managers, employees and trustees invest in the company's funds. The admission signals a preemptive move by Putnam, since a new SEC rule requiring managers to disclose their holdings does not take effect until February.

Assets in exchange-traded funds rose 20% in the last nine months through September, buoyed, perhaps, by the continuing fallout from the mutual fund scandal. In its monthly report on ETFs, the Investment Company Institute found that assets grew to $180.8 billion compared to $151 billion at the end of 2003. The $180.8 billion represents a 3.6% increase from August, when ETF assets stood at $174.5 billion.

A U.S. subsidiary of Dutch financial services firm ING Group indicated in an SEC filing that the NASD has made a preliminary recommendation that an enforcement action be brought against the affiliate and one of its registered agents. ING Insurance Co. of America said that ING Funds Distributor had received a notice from the regulatory agency and it has an opportunity to respond before NASD staff makes a final recommendation. At issue are three arrangements dating back to 1995, 1996 and 1998 in which the administrator to the then-Pilgrim Funds allowed frequent trading. The Pilgrim Funds later became part of the ING Funds. In September, ING said that an internal review of its mutual fund trading operation showed only isolated incidents of impropriety.

Morningstar's Rekenthaler, Reinkemeyer in New Jobs

After months of anticipation and uncertainty, incumbent George W. Bush managed to squeak out a victory over Sen. John Kerry to earn a second term as U.S. commander-in-chief, a decision that drew applause from Wall Street last week. Now that the dust has cleared, the question is what does a Bush win portend for the market and the economy?