Special Program Root Tag

Five states have closed their prepaid college tuition programs as assets continue to accumulate rapidly in 529 college savings programs.

Despite the recent hearings in Washington to address the flaws in the mutual fund industry (see special "Fundgate" report in this week’s Money Management Executive), new reform proposals do not address some of the main fund problems – namely market timing and late trading – analysts said Monday.

As the federal probe into securities abuses by mutual fund companies deepens, frustrated retirement plan sponsors are finding it difficult to know how best to protect investors’ assets.

While declaring it has no evidence of United States-like violations by its firms, Europe’s top mutual fund association said Friday it would look into possible violations by its companies and if any are found, draw up ways to halt them, Reuters reports.

Putnam Investments, using prominent ad agency Hill Holliday Connors Cosmopulos, took out full-page advertisements in The New York Times and The Wall Street Journal Monday calling attention to the executive replacements that occurred last week, from the chairman on down.

African-Americans are starting to close the wealth gap, in large part due to home ownership, according to analysis of Federal Reserve data by the Consumer Federation Association and BET.com. "But there is more that can be done," said Stephen Brobeck, executive director of CFA.

John D. Carifa, president, chief operating officer and director of Alliance Capital, was forced to resign by the company’s board of directors Monday because of market timing practices that occurred on his watch. Also resigning was Michael J. Laughlin, the firm’s mutual fund distribution unit chairman.

A desire for profits in a turbulent time for the market helped push mutual fund managers enough that they started allowing frequent market timing by clients, New York Times columnist Gretchen Morgenson writes.

Sponsors and managers of separately managed accounts will now be able to transfer execution prices back and forth through an automated system, thanks to CheckFree Investment Services’ new product enhancement, called Galaxy functionality.

While this week has been prosperous for most other fund companies, the story is different at Putnam Investments.

African-Americans are starting to close the wealth gap, in large part due to home ownership, according to analysis of Federal Reserve data by the Consumer Federation Association and BET.com. "But there is more that can be done," said Stephen Brobeck, executive director of CFA.

Merrill Lynch has fined two senior executives $250,000 apiece for allowing improper trading in mutual funds, according to an exclusive report in today’s New York Post. The two are Curtis Brown, San Francisco regional director, and Andy Williams, mid-Atlantic director.

Because variable annuities have sub-accounts that are structured much like mutual funds, the Securities and Exchange Commission has requested information on trading practices from most top insurers and some smaller ones, according to Judith Hasenauer, partner at Blazzard, Grodd & Hasenauer.

Securities and Exchange Commission Chairman William Donaldson said regulators are moving swiftly to curtail trading abuses in the mutual fund industry.

NASD Probes B/D Sales Of College Savings Plans

Fund industry executives who thought they might dodge the scandal bullet had their odds reduced drastically last week.

Now that New York State Attorney General Eliot Spitzer's probe has taken down the chairmen of Putnam Investments and Strong Funds, and has called the fund industry a "cesspool" filled with "vermin" in the process, he's not only gotten the attention of the entire regulatory force in the nation. He's riled the public.

In the latest sign that separate accounts are truly going mainstream, Morningstar of Chicago has just launched a new star rating system for the investment class. Some said the new service could ramp up interest in the already rapidly growing separate accounts industry, particularly at a time when mutual funds are engulfed in the regulatory scandal.

NEW YORK - No software platform for separately managed accounts is without its limitations. None can handle the multiple products that advisers and clients want to tether, and all use different interfaces, forcing SMA execs to turn to the archaic means of faxes, messengers and mail.

WASHINGTON - The crusade against mutual funds for ripping off customers is reaping benefits as Congress prepares to draft new legislation to curtail trading abuses and protect shareholders.