Special Program Root Tag

Are we there yet?

NEW YORK - New York Attorney General Eliot Spitzer's crackdown on alleged illegal trading schemes by four mutual fund companies with a hedge fund could wreak havoc on the mutual fund industry's insistence on its squeaky-clean image. The thought of fund companies cutting deals with arbitrageurs and market timers may be hard for investors to swallow. And if this potentially multi-billion-dollar practice is as widespread as Spitzer believes, it could have serious implications beyond the four firms named: Bank One Corp., Bank of America's Nations Funds, Janus Capital and Strong Capital.

Investment Company Institute President Matthew Fink has announced his plans to retire at the end of 2004. He will have spent nearly 34 years at the institute.

AIM has filed with the SEC to become the investment advisor to the Invesco funds that AIM distributes. Additionally, an Invesco entity, Invesco Gloabl Asset Management, will serve as sub-advisor for all the Invesco funds.

The New York attorney general’s office has broadened the scope of its investigation into illegal trading activities between mutual fund firms and hedge funds as it has subpoenaed the Vanguard Group, Invesco Funds and Millennium Management, The Wall Street Journal reports.

While New York Attorney General Eliot Spitzer said the practice of late-trading and market timing that he discovered in the Canary Capital Partners case is widespread throughout the mutual fund industry, some of the biggest names in the industry have yet to be contacted by his office, Dow Jones reports.

When Wall Street consultant Peter Davis left a voice mail message last Oct. 31 for a colleague of Goldman Sachs economist John Youngdahl that 30-year Treasurys were about to be discontinued, it sparked a frantic, eight-minute, $317 million buying spree at the firm that netted it a $3.8 million profit, the New York Post reports. Calling the incident "extremely embarrassing," Goldman has agreed to a $9.3 million settlement with the Securities and Exchange Commission. Davis made a similar call to MFS Investment Management, which has agreed to pay $1 million to the SEC.

Rockwater Capital Corp. has announced a long-term agreement with Northern Trust Global Advisors and IA Sciences to create a managed account platform.

Investors who were burned by the technology bubble can take heart, The New York Post reports. Amerindo Investment Advisors President and Metropolitan Opera philanthropist Alberto Vilar, who was once worth $900 million largely due to his technology funds, is having to auction off his duplex at 860 UN Plaza to offset $5 million in debt.

Massachusetts’ top securities regulator, Secretary of the Commonwealth Bill Galvin, is investigating Prudential Securities’ Boston office for illegal mutual fund trading, Reuters reports. A spokesman for Galvin’s office would not say whether the investigation involves other fund companies or provide any further details.

The Securities and Exchange Commission is considering subjecting hedge funds to routine inspections, sources told Reuters. The SEC is particularly interested in reviewing hedge funds’ trading strategies, although the sources said the SEC does not want to publicly disclose these trading strategies. The SEC is expected to release the findings of its investigation of the $600 billion hedge fund industry by the end of this month or early next month.

Standard & Poors announced Thursday that it would continue to monitor the impact of New York State Attorney General Eliot Spitzer’s investigation into the trading practices of Bank One Corp., Bank of America’s Nations Funds, Janus Capital, Strong Capital and other fund companies which Spitzer declined to name. The investigation could have an effect on S&P’s ratings of fund companies, S&P said.

Capital Fulfillment Group and College Savings Consultants have partnered to create 529Insight.com, a clearinghouse of 529 information for investors.

Real estate funds appear poised to continue on the strong path they have charted so far this year, returning 20.5% year to date versus the S&P 500’s 15.1% rise, Reuters reports.

The fund industry’s squeaky-clean image and avoidance of major scandals throughout its history may have taken a major hit Wednesday as New York Attorney General Eliot Spitzer announced he has obtained evidence of widespread illegal trading schemes that potentially cost mutual fund investors billions of dollars.

Kauser Management announced the launch of The Technical Chart Fund, a market-neutral, no-load, mutual fund that incorporates hedging strategies and is managed by a former hedge fund manager.

Many Americans will be putting off retirement because of the economy, but many of the people who said they would delay retirement said they enjoy working anyway, according to a survey from Allstate Financial. And 60% of respondents said they probably won’t stop working entirely.

Fidelity. Vanguard. JPMorgan. The names of such leading financial companies evoke security and trust. But bigger financial firms don’t always mean better performance, Reuters reports, citing a study by T. Rowe Price.

Principal Financial Group has formed a joint venture with two banks in India in order to sell long-term mutual funds and other financial services in that market.

AllianceBernstein is rolling out six mutual funds that will be modeled after investment strategies that its private client team uses.