Compliance

WASHINGTON — Given another day to consider the Treasury Department’s plan to backstop Fannie Mae and Freddie Mac, lawmakers were considerably less enthusiastic and seemed likely to make significant changes. Some Senate Banking Committee members were downright skeptical, arguing that the plan’s costs must be pinpointed.

Turning the collection of market data into a competitive business is a fatally flawed idea, said the Securities Industry and Financial Markets Association last week in response to a Securities and Exchange Commission proposal that seeks to do so.

How serious are liquidity problems with money market mutual funds?

The ongoing credit crisis saga has taken a tremendous toll on hedge funds due to their exposure to structured mortgage-backed assets-and for those heading or parsing trades overseas to avoid U.S. taxes: Beware.

Federal Reserve Chairman Ben Bernanke called for a stronger central bank last week, and outlined a proposal that would provide the Fed with more regulatory control over large New York-based financial companies that are not associated with commercial banks, like Merrill Lynch, Goldman Sachs, Morgan Stanley and Lehman Brothers.

According to a study released by the Investment Company Institute, mutual funds voted overwhelmingly in support for management proposals in 2007, yet a mere 38% of shareholder proposals were backed.

The Asian Development Bank has launched a new environmentally based mutual fund.The Future Carbon Fund is tied to environmental initiatives from the Kyoto Protocol, which is set to expire at the end of 2012.

A source for the China Securities Regulatory Commission (CSRC) recently stated that the CSRC only suggested that senior mutual fund officials remain in China until the Olympics in early August to keep a stable market, they are in no which way barring them from leaving the country.

In a report released yesterday on what went wrong at the ratings agencies responsible for grading instruments tied to subprime debt, the Securities and Exchange Commission found a breakdown in communications.

Three high-profile staff members at the Investment Company Institute have already left or are planning on leaving the mutual fund lobbying group in the near future, Defined Contributions & Savings Plan Alert reports.

If it isn’t enough that federal regulators are looking into whether the managers of two failed Bear Stearns hedge funds, Ralph Cioffi and Matthew Tannin, misled investors into staying with the risky investments as they were tanking, they are now probing whether they inflated the funds’ returns and outlook to obtain loans from banks or prime custodians, BusinessWeek reports.

The Alternative Investment Management Association of the U.K. is about to launch a third set of codes for hedge funds-of-funds, on the heels of two other sets of best practices issued in the last 18 months.

On Wednesday morning, hedge fund fugitive Samuel Israel III surrendered himself to law enforcement officials in Southwick, Mass. Israel has been on the run since June 9, when he was set to report to prison in Ayres, Mass. His car was found that day on a Westchester County, N.Y., bridge with the words “suicide is painless” written on the hood.

After completing his service as chief information office on June 30, Corey Booth parted ways with the Securities and Exchange Commission in order to pursue a new career with Boston Consulting Group in New York.

This week, the Hong Kong Securities and Futures Commission decided that effective Aug. 1, mutual fund advertisements will no longer need to be pre-approved.

NEW YORK - The freewheeling days for hedge funds may be numbered.

WASHINGTON - Volatile market conditions and the credit crisis have put the hard brakes on new hedge funds. The number of hedge funds launched in the first quarter was the lowest for a quarter since 2000, while fund liquidations increased from a year earlier.

"I cheated my investors because I was afraid to admit my failure. I did not want the world to think I was not good enough and I did not want my family to see me as a failure."

Cash-strapped banks are hoping the Federal Reserve will loosen restrictions keeping private-equity firms from giving them capital, according to The Wall Street Journal.

Massachusetts Secretary of the Commonwealth William Gavin charged UBS AG's UBS Securities, LLC and UBS Financial Services with fraud and dishonest conduct regarding the firms’ retail sales of auction-rate securities.