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A New York federal court judge has dismissed the second of five cases which challenge the independence of mutual fund directors based on their allegedly high pay.

It was ten months in the making, but Mario Gabelli's long-awaited initial public offering of his Rye-based firm, Gabelli Asset Management, Inc. was finally held on Feb. 11.

The SEC has proposed changes which it says will simplify the form which mutual funds use to wind up business. The proposed amendments to Rule 8f-1 under the Investment Company Act and Form N-8F simplify and reorganize the form which funds use to de-register, the SEC said in a statement late last month. The industry had until Feb. 5 to comment on the proposal.

Prudential Investments has introduced the Prudential Tax-Managed Equity Fund which is designed to reduce the effect of capital gains distributions on the return of equity mutual fund investments.

Stein Roe Mutual Funds of Chicago has introduced the Stein Roe Small Company Growth Fund. The no-load fund will seek long-term capital appreciation through investment in stocks of small, growing companies.

The Fidelity and Deposit Companies (F&D) of Baltimore announced its new E-Risk Protection Program, a new risk management service designed to help financial service firms reduce risk related to online business activities.

Lawyers have become clear beneficiaries of fights over the performance of closed-end funds and it is the shareholders of closed-end funds who are primarily paying for the lawyers' good fortunes.

A federal court judge has dismissed a lawsuit against T. Rowe Price Associates, giving support to mutual fund industry executives' contentions that fund directors do not lose their independence by serving on more than one mutual fund board.

Worth Bruntjen, a former portfolio manager for the asset management unit of the Piper Jaffray Cos., last week agreed to pay $100,000 to settle SEC charges that he misled investors about his derivative investments from 1992 through at least April, 1994.

T. Rowe Price Associates plans to join the growing list of mutual fund companies entering the money management business in Japan.

The most important issue addressed in this year's SEC letter to CFO's is the requirement that funds include in their reporting of revenue, payments, in cash or kind, they receive from broker/dealers for sending them business. The letter also reminded CFOs of the requirement that funds update their performance bar chart information to reflect the most recent quarterly or year-end performance, said Kenneth Domingues, chief accountant of the SEC's Division of Investment Management.

The Moneypaper, a newsletter based in Mamaroneck, NY, has started a new no-load mutual fund which is based on the newsletter's 63-stock index of companies that have low or no-cost dividend reinvestment plans. The company announced plans to start the fund in the fall.

SSB Citi Asset Management Group of New York, a division of Citigroup, announced that its two Australian investment operations, Salomon Smith Barney Asset Management Australia (SSBAM Australia) and Citibank Global Asset Management (CGAM) will be combined.

Freedom Capital Management, an asset management firm based in Boston with $7 billion in assets under management, announced that it has formed a partnership with Essex Corporation of New York, a distributor of mutual funds, annuities and life insurance to banks. Under the partnership, Essex Corporation will provide Freedom Capital's family of six FundManager Portfolios, which are funds-of-funds, to more than 150 banks and broker/dealers across the country.

Alliance Capital Management and Hanwha Securities announced the signing of a letter of intent for Alliance Capital to assume full control of Hanwha Investment Trust (HITCO), a Korean investment management company.

The Central European Value Fund announced that it has added Estonia to the list of countries in which the fund can invest. In addition to Estonia, the fund is currently authorized to invest in Austria, Croatia, the Czech Republic, Hungary, Poland, Romania, Slovenia and Slovakia. The fund invests at least 65 percent of its assets in central Europe, It may also invest up to 35 percent in eastern European countries. The fund is listed on the New York and Osaka stock exchanges.

Wilshire Associates announced that the first Wilshire 5000 Index Fund will be launched Feb. 1. The fund will seek to replicate the index while keeping transaction costs low.

The boards of Scudder New Europe Fund and Kemper Europe Fund announced their approval of the reorganization of both funds into a single open-end fund. The combination must be approved by shareholders of both funds.

The U.S. subsidiary of a Canadian financial services company has joined with a mutual fund firm to seek the assets of high net-worth investors here and in Canada.

In an effort to offer actively-managed performance at a cost and risk more associated with an index fund, J.P. Morgan has introduced a hybrid fund, the SmartIndex Fund.