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Massachusetts Financial Services last week agreed to pay a $50 million fine to the SEC for not disclosing directed-brokerage agreements, marking the first time the SEC has penalized a fund company for failing to disclose its trading arrangements with brokerage firms in exchange for promoting its funds.

The SEC is going to be paying closer attention to abnormal buying and selling in mutual funds. Cash flow is one area that will get heightened scrutiny.

The Money Management Institute could be renamed "Money Management International," now that Nikko Cordial Advisors of Japan has become the trade organization's first overseas member.

With a potentially groundbreaking governance proposal pending, requiring an independent chairman, there's been a lot of bickering in the mutual fund industry about how to address conflicts in the boardroom.

Putnam's woes are far from over as federal regulators are swinging for the fences and are poised to ask a judge to punish the firm more severely than any company mired in the scandal so far.

The high price of not keeping up with regulatory demands is well documented, but some in the fund industry are growing increasingly concerned about the growing costs of implementing new measures to keep up with a steady stream of proposed requirements.

Mutual fund shareholders' woes stemming from revelations of endemic misconduct has amounted to a windfall for investment bankers. The pace of consolidation within the asset management industry continues to accelerate under the weight of massive regulatory investigation, according to a new study by Putnam Lovell NBF Securities.

Credit Suisse First Boston has announced the creation of an alternative investments unit.

Prudential Investments and China-based Everbright Securities have received a license to launch a fund product in mainland China under the name of a newly formed company, Everbright Prumerica Fund Management Co. The new venture, which will be based in China, will be 67%-owned by Everbright and 33%-owned by Prudential. However, by late this year, Prudential's share could hop up to as much as 49%, thanks to a relaxation of rules China is expected to make stemming from its joining of the World Trade Organization in 2001. The company will have about 100 million yuan worth of registered capital, or $12 million in U.S. dollars.

SEC Names Ricciardi Head of Boston Office

Religion may be a solemn subject. But for the Ave Maria Mutual Funds managed by Schwartz Investment Counsel of Bloomfield Hills, Mich., a sense of humor, along with a morality check, is a blessing.

Ameritrade, a well-established online brokerage firm, says it is targeting investment advisers, large and small, to develop assets and build wallet share and is making rapid progress because of a big pricing advantage.

The debate over soft dollars nearly erupted into a barroom brawl on Capitol Hill last week, as the Senate Banking Committee held an open hearing on the much-maligned practice of mutual funds using brokerage commissions to pay for research and overhead costs.

A report by the Asian Development Bank on worldwide use of third-party trustee services has captured India's imagination. Indian securities regulators are studying a proposal to appoint independent trustees to the boards of mutual funds, according to Business Standard.

The Boilermakers-Putnam saga doesn’t end with market timing. Massachusetts regulators are now looking into whether Putnam issued rebates to favored 401(k) plans, including the Boilermakers’ – and whether trustees of those plans misused the funds, intended for the administrative costs borne by all of the participants in the plan, The Wall Street Journal reports.

Four federal judges will hold the first hearing this week on nearly 100 private lawsuits against six mutual fund companies involving improper trades, The New York Times reports. The multi-jurisdictional hearing is taking place in Baltimore, as Maryland is a favored state of incorporation for mutual funds.

Investors withdrew $10.7 billion from fund companies implicated in the scandal in the last four months of 2003, but rewarded competitors with clean records, Dow Jones Newswires reports.

Chester Spatt, the Mellon Bank professor of finance and director of the Center for Financial Markets at Carnegie Mellon University, has been named chief economist and director of the Securities and Exchange Commission’s Office of Economic Analysis, the Commission said Wednesday.

Bear Stearns had fired three clearing executives for aiding Canary Capital Partners’ illegal trades, and the senior managing director of the unit has taken voluntary leave, The Wall Street Journal reports.

After the addition of Nikko Cordial Advisors, Ltd., Wednesday, the membership roster of the Money Management Institute is no longer solely U.S.-based.