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An amended lawsuit against a UBS Paine Webber / Mark Advisors hedge fund brings to light a challenge faced by the growing number of fund companies also offering SEC-registered hedge funds.

While hedge funds are not registered with or required by the Securities and Exchange Commission to reveal their holdings, a populist uprising among investors is forcing hedge fund managers to reveal more information about their holdings, The Wall Street Journal reports.

The Securities and Exchange Commission is investigating whether Morgan Stanley brokers have been recommending inappropriate mutual fund share classes for purchase by their clients, The Wall Street Journal reports. Mutual Fund Market News earlier reported on a class action lawsuit against Morgan Stanley concerning B shares.

While hedge funds are not registered with or required by the Securities and Exchange Commission to reveal their holdings, a populist uprising among investors is forcing hedge fund managers to reveal more information about their holdings, The Wall Street Journal reports.

Mutual fund complexes branching into hedge funds to woo new customers are facing scrutiny from regulators who fear that traditional mutual fund investors could be harmed as the two different types of funds are offered under one roof, lawyers told Reuters Monday.

The market’s worst three-year stretch in history has definitely taken its toll on the assets of the nation’s biggest fund companies. And no firms have been harder hit than the ones at the top.

AIM Investments of Houston and Invesco Funds Group of Denver said they intend to create a single distribution platform for the two companies’ retail products. Both companies are subsidiaries of independent investment manager Amvescap, which has $333 billion in assets under management.

Even as industry profits and portfolios tumble, mutual fund directors got rather sizeable pay raises in 2002, according to a Reuters report on a survey by Management Practice, Inc. Director pay at the top 50 fund companies increased 8%, with $113,000 their median compensation, according to Management Practice.

The Office of Management and Budget approved the Securities and Exchange Commission’s rule requiring mutual funds to publicly disclose proxy votes, handing a setback to the $6 trillion fund industry, Reuters reports.

ING Vice Chairman Michel Tilmant told a press conference in Frankfurt late Friday further cost-cutting measures, including layoffs, would continue into 2003, Reuters reports. This is in addition to a $545 million cost-cutting program last year.

Participation in 401(k)s has dropped to 73%, its lowest number since 1991.

It is no secret that the mutual fund industry has taken its lumps during the market's worst three-year stretch in history, having lost about $1 trillion in assets, while the better part of its 95 million investors have seen their retirement savings decimated.

An amended lawsuit just filed against a UBS Paine Webber/Mark Advisors hedge fund could bring to light some of the biggest challenges faced by the growing number of firms sponsoring SEC-registered hedge funds. The suit challenges earnings and investment representations, and raises questions about how these funds are explained to brokers and marketed to investors.

Those saying technology will lead the way out of the bear market, may only be half right, even if what they anticipate actually comes to fruition.

Looking beyond the valley we have been in the past three years, we can say with confidence that mutual funds will remain a preferred investment vehicle for tomorrow's investors.

House Financial Services Capital Markets Subcommittee Chairman Richard H. Baker (R-LA) dashed off a letter to Securities and Exchange Commission Chairman William Donaldson last Wednesday asking the SEC to look into mutual funds fees. Fee tables aside, Baker asserted investors are "ignorant" of how much they are paying.

Pax World Balanced Fund last week introduced a contribution program whereby investors can contribute dividends and capital gains for humanitarian aid to Iraqi citizens affected by the ongoing war.

No, a "high-tech compliance system" is not an oxymoron. In fact, just about every mutual fund company is grappling with ways to leverage technology to increase the speed and efficiencies of mundane but vital compliance tasks, while keeping their eyes trained on the bottom line and trying to rein in costs.

When I hear that, I know I've done my job. I have served the New York region as a mutual fund and separately managed accounts wholesaler for Lord Abbett for more than three years, and I love my job. My clients are financial advisers at Merrill Lynch, Salomon Smith Barney and several regional brokerage firms and their end investors.

John Hancock Financial Services has appointed James Shepherdson as president of retirement services and SVP. In his new position, Shepherdson will be responsible for sales and marketing of the firm's annuities and life insurance products through third-party channels.