Special Program Root Tag

The NASD has fined Montpelier, Vt.-based Sentinel Financial Services Company $700,000 and censured it for not doing enough to stop market timing in its funds.

In its initial probe of four top Canadian mutual fund firms, the Ontario Securities Commission announced that market timing did not take place. The OSC also investigated CI Mutual Funds, AIC Ltd., AGF Fund Management and Investors Group for late trading and found no instance of that, either.

Amvescap continues to phase out the Invesco brand, as it recently cut 26 jobs, including four fund managers, at the beleaguered fund shop's offices at the Denver Tech Center.

J.P. Morgan Chase and Lehman Brothers Holdings have been charged in a class-action lawsuit for helping hedge fund Canary Capital Partners engage in trading violations that harmed long-term shareholders. Until the lawsuit, both J.P. Morgan and Lehman had managed to stay above the far-reaching mutual fund scandal that has tainted more than a dozen financial service firms with accusations of improper trading activities. The lawsuit was filed in federal court in Baltimore.

SAN ANTONIO -- The Investment Company Institute held its annual Tax & Accounting conference in 2003, just nine days after the scandal broke last year amid a cloud of controversy and confusion and long before the full scope of Fundgate would be realized by the industry.

Necessity is the mother of invention, the old adage insists, and with improprieties abounding in the mutual fund industry, more and more firms are finding they need to forge new identities.

After 27 years, the Calamos family decided to share the fruits of their labor by taking the firm public. Money manager Calamos Asset Management has set the terms of its initial public offering at 18 million Class A shares with an estimated price range of $15.50 to $17.50 a share.

The Securities and Exchange Commission has charged RS Investment Management, CEO Randall Hecht and Steven Cohen, former chief financial officer, with allowing certain mutual fund investors to market time the firm's funds. These investors profited from the trades, potentially at the expense of other shareholders, and RSIM was able to earn "substantial advisory fees."

TCW Galileo Funds Names Haden Independent Chair

SAN ANTONIO -- As new governance requirements officially took effect last week, panelists here at the Investment Company Institute's Tax & Accounting Conference said the proper valuation of securities and the monitoring of such processes will be one key to keeping firms out of regulatory hot water.

CGM Funds of Boston, managed by Capital Growth Management and its two well-known senior executives and company co-founders Ken Heebner and Bob Kemp, are trying to make certain that all fund board trustees are created equal--no matter what additional board roles they accept.

British investment services provider Old Mutual opened a mutual fund subsidiary this week in Denver’s beleaguered financial district, Rocky Mountain News reports.

State Street Research & Management shuttered four institutional mutual funds that failed to attract enough assets to become profitable, CBS MarketWatch reports.

Three mutual funds have drawn the Securities and Exchange Commission’s ire for alleged violations resembling the accounting sins committed by Bridgeway Capital Management, Bloomberg News reports.

New SEC regulations resulting from the fund scandal and the Sarbanes-Oxley Act will cost mutual fund companies millions of dollars as a result of the need to hire thousands of additional lawyers, chief compliance officers, accountants, tech personnel and independent directors, the Boston Herald reports.

The Securities and Exchange Commission is reconsidering its proposal to require funds to impose a 2% redemption fee on shares sold within five days of purchase, The Wall Street Journal reports. 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 to set fees.

Memories of losses during the bear market of the early 2000s, the fund scandal and heavy-hitting new legislation have made investors nervous. As a result, investment companies around the world are scrambling to restructure, a new report finds.

The National Retirement Planning Coalition plans a media campaign for Nov. 14 through Nov. 19, which is National Retirement Planning Week. This is the third year that the group, whose membership includes the National Association for Variable Annuities, has sponsored the event, and the second year that Ben Stein has been involved.

The SEC has charged RS Investment Management (RSIM), CEO Randall Hecht and Steven Cohen, former chief financial officer, with allowing certain mutual fund investors to market time the firm’s funds. These investors profited from the trades, potentially at the expense of other shareholders, and RSIM was able to earn "substantial advisory fees."

The increases in compensation for individuals who sell wholesale investment products nearly doubled from 2002 to 2003, according to a recent survey.