Special Program Root Tag

Putnam Investments could pay penalties and fines in the hundreds of millions of dollars, according to an SEC legal brief, The New York Times reports today.

Putnam Investments will be cracking down on the perks brokers use to entice fund managers and other executives to give them their business, Reuters reports.

Nearly one-third of 960 mutual funds that the SEC surveyed made no attempt to fair value their funds, the SEC revealed this week, according to today’s Wall Street Journal. And more than half conducted fair value computations only five times in the volatile 20 months through September, according to the SEC.

As growing companies strain to compete with larger organizations in recruiting, retaining, and rewarding key employees, many have yet to invest in nonqualified retirement plans, according to a study released this week by the Principal Financial Group.

PNC Advisors is selling nearly 40% of the assets under management in its ultra-high-net-worth unit to a private company being formed by some of its former executives.

PALM DESERT, Calif – In his last appearance before his constituents, Investment Company Institute President Matthew Fink went out swinging. Fink defended the trade group against a Wall Street Journal report Monday suggesting it knew about market timing long ago, as the ICI kicked off its annual Mutual Funds and Investment Management Conference here yesterday.

Three top executives, including the general counsel, the chief investment officer and the CEO, knew about improper trading by Putnam Investments fund managers , a board of trustees report reveals. And the abuse was more rampant than has been reported, according to the report, expected to be released today, according to this morning’s Wall Street Journal. In fact, the paper says, Putnam warned about 40 employees against timing.

While brokers, bankers and hedge funds certainly played a role in the fund trading scandals, mutual fund executives wittingly turned a "blind eye" to the misdeeds, Paul Roye, the SEC’s top fund regulator, told attendees at the ICI Investment Management conference in Palm Desert, Calif., yesterday.

Soft-dollar advocates are going to have a harder time pleading their case.

Board members beware. In addition to racking up a gargantuan $675 million settlement with Bank of America and FleetBoston Financial last week, regulators made it clear boards are fair game, as it ousted eight of the 10 directors of the beleaguered Nations Funds board.

The search is over.

Without their massive operations labyrinth and powerful technology engines, the mutual fund and separately managed account industries would not be $8 trillion retail behemoths they are today.

The U.S. Attorney's office has filed criminal charges against three Mutuals.com executives, charging them with helping hedge funds deceive mutual fund companies by hiding their market-timing activities in separate accounts. Mutuals.com Chief Executive Officer Richard Sapio, President Eric McDonald and Chief Compliance Officer Michele Leftwich face up to five years in prison. This is the first time that federal, not state, regulators have filed criminal charges in the ongoing market-timing and late-trading investigation.

The SEC has formed a special committee to help determine whether 529 college savings plans offered through mutual fund companies and brokerage firms are overcharging investors.

Calpers, the nation's largest pension fund with $167 billion in assets, last week adopted a code of ethics for its outside money managers and consultants.

Fidelity has injected extra flexibility and personalization into its variable annuities, and is trying to sell its customers on virtually nonexistent tax penalties.

There is no doubt that a rise in regulation has increased costs for mutual funds in the past few years -- to the point of pain for many small, independent fund companies. But are things bad enough to prompt these companies to give away their assets just to get out of the business?

If advisers needed a go-go growth fund in the late 1990s, they probably turned to Janus Capital Group. Yet the aggressive strategy that Janus used to manage most of its funds ultimately backfired. After the tech bubble burst, the Janus name became a synonym for corporate management turmoil, manager exodus and vast fund outflows.

The standoff between SMAs and AIMR is sort of like Groucho Marx' famous quote that if it was a club that would let him in, he wouldn't want to join it.

The "quiet company" is about to make a little more noise in the financial services market.