Compliance

Charles Schwab Corp. of San Francisco is facing a potential class-action lawsuit over no-load ultra short bond fund that allegedly loaded up on mortgage-backed securities and misled investors.

Eliot Spitzer, onetime Wall Street crusader, New York State Attorney General and New York Governor in a first term that ended with his abrupt resignation on March 17, may be forced to release thousands of incriminating e-mails linked to his alleged smear campaign against Senate Majority Leader Joseph L. Bruno.

Albany District Attorney David Soares has done an about-face and has told New York Senate Majority Leader Joseph Bruno that ex-governor Eliot Spitzer’s alleged involvement in an investigation into Bruno’s whereabouts was absolutely, positively Spitzer’s orders, according to reports over the weekend.

A £1 billion ($2 billion) hedge fund run out of London by Lewis Chester, Pentagon Capital Management, is under investigation by the Securities and Exchange Commission, The New York Times reports this morning.

Treasury Secretary Henry M. Paulson Jr. said Wall Street investment firms should provide more information on their financial condition if they are allowed to borrow money from the Federal Reserve.

Eliot Spitzer, former Wall Street crusader, New York State Attorney General and New York Governor in a first term that ended with his abrupt resignation on March 17, may be forced to release thousands of incriminating e-mails with regards to his alleged smear campaign against Senate Majority Leader Joseph L. Bruno.

Shareholders in a number of large Fidelity mutual funds, most notably the $73 billion Contrafund, succeeded in forcing a proxy vote that will take place later today on whether the company should institute a “genocide-free” investment policy, the Associated Press reports. The unbinding measure is unlikely to pass, however.

The Securities and Exchange Commission recently suspended and fined two brokers with Wachovia Securities $250,000 each for their roles in a market-timing scheme that cost mutual fund shareholders hundreds of thousands of dollars in losses, writes The Miami Herald.Thomas C. Bridge, 41, of Fort Lauderdale and James D. Edge, 46, of Lake Worth, both worked at Wachovia's Boca Raton office. Edge was Bridge's supervisor.According to Judge Brenda Murray, Bridge engaged in numerous market timing trades, prompting complaints from mutual fund companies. Instead of stopping Bridge, Edge helped him circumvent trading restrictions, including the use of multiple account numbers and broker ID numbers to hide transactions.Bridge has been suspended for a year and Edge has been suspended for 30 days, with the stipulation that he never be a supervisor again.The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

A federal judge in Pennsylvania has given final approval to a $14 million settlement against New York Life Insurance Co. by employees who said the company’s retirement plans were improperly invested into mutual funds owned by New York Life.

A proposal by the Securities and Exchange Commission to shorten mutual fund disclosure statements is meeting widespread support, and a new rule could take effect by 2009, if not sooner.

The British government is considering an overhaul of their tax code for mutual funds that could put the responsibility for declaring income from funds directly on investors, according to foreign news reports.

The bonuses and pay packages of the chief executives at Countrywide Financial Corp., Citigroup Inc., and Merrill Lynch & Co. were not made in the interest of the companies’ shareholders, particularly as the subprime crises was unfolding, according to a report from a U.S. House committee.

The Securities and Exchange Commission has filed an order against a top advisor at Fidelity Investments, after a four-year investigation into the inappropriate use of gifts and the entertainment of prospective clients.

As part of a settlement with New York Attorney General Andrew Cuomo, Fannie Mae and Freddie Mac will establish a home appraisal watchdog organization to help prevent fraud in valuing homes, Reuters reports.

WASHINGTON - House Financial Services Committee Chairman Barney Frank is preparing a $35 billion housing package that would expand the government's role in combating the sub-prime mortgage crisis.

After years on the back burner, the Securities and Exchange Commission's rule governing mutual fund marketing fees is in store for a "complete overhaul," according to commission chairman Christopher Cox.

WASHINGTON – House Financial Services Committee Chairman Barney Frank is preparing a $35 billion housing package that would expand the government's role in combating the sub-prime mortgage crisis.

Oppenheimer & Co. has been ordered to pay $250,000 for failing to supervise the improper market timing of mutual fund shares from January through September 2003, according to FINRA. The firm has also been ordered to pay $4.25 million in restitution to more than 60 mutual fund companies.

The Securities and Exchange Commission said it wants to require investment advisers to provide clients with online brochures describing their services, fees and conflicts of interest in a reader-friendly format.

Investors holding municipal bonds directly or through mutual funds could see their returns diminished by ratings agencies' recent downgrades of troubled bond insurers, according to a report prepared for Congress.