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The SEC’s latest investigation at Bear Stearns concerns municipal bond offerings, not municipal bond mutual funds, as incorrectly cited in a Tuesday, Oct. 19 MME news item.

Municipal bond underwriting practices at Bear Stearns are under a Securities and Exchange Commission investigation, the company indicated in a regulatory filing Friday. The Chicago branch of Bear Stearns is also being checked out by the U.S. Attorney’s office in Illinois and state securities regulators, both of which have served the firm with subpoenas.

The Securities and Exchange Commission is investigating FMI Mutual Funds for possible improper trading practices, the company indicated Friday in a regulatory filing.

After 11 straight months of positive flows, Canadian mutual funds suffered outflows of $545.4 million in September, The Globe and Mail reports.

The National Association of Securities Dealers has fined Sentinel Financial Services Co. $700,000 and censured it for not doing enough to stop market timing in its funds. The market timing, which took place in three Sentinel Group funds, was partly a result of a shoddy supervisory system, the NASD said.

Three mutual funds have reportedly drawn the Securities and Exchange Commission's ire for alleged violations resembling the accounting sins committed by Bridgeway Capital Management. The SEC is now targeting the Putnam Research, Gartmore U.S. Growth Leaders and the WWW Internet funds for potentially erring in performance-based fee calculations. The fees in question rise and fall in proportion to a fund's ability to beat its benchmark, such as the Standard & Poor's 500 Index.

The Securities and Exchange Commission is reportedly reconsidering its proposal to require funds to impose a 2% redemption fee on shares sold within five days of purchase. Of the 280 comment letters the SEC has received on this proposal, 250 are against it, citing increased costs for investors, the difficulty of implementing since many funds are held through retirement or omnibus accounts and the inappropriateness of a government body setting fees. In fact, some at the SEC reportedly believe that requiring funds to disclose their policies to detect and prevent timing is adequate, and they are pushing to make a redemption fee optional.

At Janus Capital Group of Denver, September wasn't such a bad month. But folks there may not be breaking out the fluted champagne glasses -- yet. After a brutal bear market that wrought havoc on the tech-heavy firm, and then the fund scandal, the question of whether or not the firm is finally turning the corner still remains.

It's official.

Fidelity and Vanguard may have avoided the stench of recent scandals, but they couldn't escape the ire of one investment adviser or his quarterly Hall of Shame listing the worst mutual funds in the country. The Fidelity Destiny 1 fund and the Vanguard U.S. Growth fund are two of 15 funds that Adam Bold, founder and CIO of Overland Park, Kan.-based The Mutual Fund Store, a fee-based investment advisory firm, has singled out as being worthy of such a notorious distinction.

Bear Stearns is reportedly investigating whether top executives in its private-client brokerage unit approved improper mutual fund trades. According to internal documents, Bear Stearns is examining e-mails from 109 of its employees, including several firm executives. Included in that group are the heads of the private client group, Steve Dantus and Vincent Dicks. In addition, the New York Stock Exchange has asked the duo for statements.

T. Rowe Price Vice Chairman James S. Riepe has been named chairman of the Investment Company Institute, succeeding Paul G. Haaga, Jr., EVP of Capital Research and Management Co. Haaga, who served two one-year terms, will continue as vice chairman, in the tradition of past chairmen. Riepe is also chairman of T. Rowe Price Mutual Funds and is currently on the board. This will be his second term as chairman of the ICI, having served in the position between 1990 and 1992.

The increases in compensation for wholesalers of mutual funds, annuities, retirement services and other investment products nearly doubled from 2002 to 2003, according to a recent survey by DGL Consultants. DGL found that after a 3% increase in cash compensation in 2002, compensation jumped 5.9% in 2003. Wholesalers already sitting in the 75th percentile felt an increase of 9.1%, while wholesaler incentive compensation rose 8.6%. "The objective of this survey is to provide a frame of reference for evaluating the total sales compensation package," said DGL President Don Lariviere.

Transamerica Hires Skipper For Large-Growth Products

With so many surveys reiterating Americans' lack of preparedness for retirement, it's certainly good news that assets in 401(k) plans are finally growing again. However, that's primarily because the stock market performed so well in 2003, not because employers or investors are committing more money.

For equity mutual funds, the fiscal third quarter yielded mixed results in terms of performance, but conditions are expected to improve as investors look for a fresh start heading into the new year.

Thomas A. Olson is CEO and founding partner of the Colony Fund, a new mutual fund designed to include smaller investors in the private sector's push into space. The fund, still in pre-SEC registration mode, seeks to invest in commercial space enterprises, which the founders believe will be a preeminent market sector in this century, one day resulting in human settlements in space.

New York Attorney General Eliot Spitzer on Thursday sued Putnam Investments’ parent company, Marsh & McLennan, for allegedly taking payoffs from insurers.

The debate over the regulation of hedge funds will come to a head later this month as the Securities and Exchange Commission plans to hold a vote at its meeting on Oct. 26, sister publication Securities Industry News reports.

Many of the new rule proposals governing the maligned mutual fund industry have already been ratified by the Securities and Exchange Commission, but the agency’s chairman said in New York Thursday that those who oversee the markets are next in line.