Special Program Root Tag

The country's second-largest securities firm, Morgan Stanley, agreed to a $50 million settlement after the SEC found that 16 "preferred" funds compensated Morgan Stanley brokers for an extra marketing push by allowing the firm to handle more of its stock and bond trading. That extra trading business, in turn, resulted in millions of dollars in additional commissions for the broker/dealer.

Even with the probes and charges of New York, Massachusetts and federal regulators widening to unprecedented lengths, stock funds netted $23.8 billion in October, according to Lipper's month-end analysis.

Viewed as watchdogs by some and lapdogs by critics, mutual fund boards have arguably seen their responsibilities grow alongside the complexity and demands of the business. Directors have recently come under fire as a result of Eliot Spitzer's probe into fund trading, as they were presumably unaware of the violations. Questions of board due diligence and the adequacy of the governance structure obviously emerge.

In the Oct. 17 issue, PENN Capital Management's high-yield bond strategies were inadvertently omitted as top performers in CheckFree's SMA Scorecard. The PENN Core Opportunistic High Yield Bond and PENN Core High Yield Bond strategies returned 35.78% and 24.50%, respectively, for the one-year period ending Sept. 30.

Alpine Management & Research, Purchase, N.Y., has introduced a unique dividend-paying fund that it claims is more active than many new offerings designed to take advantage of the latest tax laws favoring qualified dividends.

Fidelity Brokerage Co. President Ellyn McColgan is not only one of the most influential women in the investment management business, she is one of the most influential businesswomen in America.

Who are the players in the managed account business, and what are they up to?

Money Management Executive will not publish Thursday and Friday due to the Thanksgiving Holiday. We will resume our regular schedule on Monday, Dec. 1. We thank you for your readership and wish you and your family a Happy Thanksgiving.

In a move designed to alert investors of usually unreported upon costs, NASD has just proposed that mutual fund companies be required to disclose fund expenses in advertisements and other sales materials that promote performance.

While many of the heaviest allegations and admissions of improper trading have involved East-Coast based firms like Putnam Investments and Bank of America, and even Midwest firms such as Strong Capital, an admission of market-timing by San Francisco-based Fremont Investment Advisors underscores the breadth, rather than just the depth, of the mutual fund scandal.

Phoenix-based Security Trust Company, N.A. participated in late trading and market timing with the maligned hedge fund Canary Capital, the Securities and Exchange Commission charged in a Phoenix federal district court Tuesday. New York Attorney General Eliot Spitzer also pressed grand larceny charges of his own.

Janus and Putnam are playing defensive. Big time.

Zurich-based UBS has fired two of its financial advisers in the U.S. and suspended nine more for a few weeks, Reuters reported Tuesday.

New York Attorney General Eliot Spitzer and the Securities and Exchange Commission each slapped a subpoena on Bear Stearns Co.in the latest chapter of their growing mutual fund probes, Reuters reports.

A year-and-half ago, in the wake of Enron’s implosion, North Carolina State Treasurer Richard Moore decide to get tough. Realizing that he had limited power, but was charged with overseeing $56 billion in one of the country’s largest public pension funds, he teamed up with the then New York State Comptroller and New York State Attorney General Eliot Spitzer to promulgate stronger corporate disclosures for public pension funds.

Amvescap, parent company of the Invesco and AIM fund families, announced yesterday it expects to face federal and New York State civil charges over market timing, and regulators are expected to press criminal charges against Security Trust Co. today.

The spate of allegations against mutual fund firms for abusive trading practices could have a dramatic effect on investor confidence, Henry Paulson, chairman and chief executive of Goldman Sachs said Monday.

After disclosing Friday in a quarterly filing with the SEC it had found instances of late trading and market timing, Charles Schwab’s CEO issued a statement Monday to employees.

Setting savings goals is important in creating confidence about retirement, finds a survey from Manulife USA. Only half of Americans in the workplace have tried doing so, however.

State regulation of insurance is still the way to go, representatives from the National Conference of State Legislatures told a congressional panel recently. The representatives were speaking before the U.S. House Financial Services Committee’s Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises.