Compliance

Especially now that the news has leaked that hedge fund managers are raking in incredible salaries-some making more than $1 billion a year-Congress is undoubtedly going to be taking a serious look at increasing regulation of hedge funds, according to a number of reports. And that has many hedge fund managers stepping up their political contributions, hiring lobbyists and, in some cases, forming their own political action committees, according to The Economic Times.

The NASD fined two Fidelity Investments broker/dealers-Fidelity Investments Institutional Services Co. and Fidelity Distributors Corp.-$400,000 for distributing misleading performance information about investment plans sold primarily to military personnel.

How many regulators does it take to develop a clear, easy-to-read privacy notice?

A Kentucky lawsuit decided in early 2006, and a similar tax case now being tried in North Carolina, could spell the demise of single-state municipal bond funds as we know them.

NEW YORK-Fund companies can anticipate fewer lawsuits from shareholders over what they claim are excessive fees, according to panelists at the Practising Law Institute's "Investment Management Institute 2007" here.

NEW YORK-Soft dollars stay at the top of the "to do" list for examiners at the Securities and Exchange Commission in 2007, said Gene A. Gohlke, associate director of the SEC's Office of Compliance Inspections and Examinations.

It's been three years since the Securities and Exchange Commission began requiring funds to annually disclose their proxy voting records. When the measure was passed, many dismissed it as a mere administrative nuisance, reasoning that even if investors eventually began to pour through funds' voting records, the day when they would be able to systematically make sense of the information, let alone actually be interested in it, was a long way off.

Although the Securities and Exchange Commission revealed the findings of two cost/benefit studies it commissioned on the proposed independent directors rule late last year, the U.S. Chamber of Commerce sought access to the complete report, including any records supporting the decision to undertake the studies. The SEC decided not to share the information with the U.S. Chamber, a decision it is now appealing.

It's been three years since the Securities and Exchange Commission began requiring funds to annually disclose their proxy voting records. When the measure was passed, many dismissed it as a mere administrative nuisance, reasoning that even if investors eventually began to pour through funds' voting records, the day when they would be able to systematically make sense of the information, let alone actually be interested in it, was a long way off.

The comment period for the independent directors rule ended a month ago, and as the Securities and Exchange Commis-sion nears a vote on the measure, speculation is increasing that it will bend to the industry's fierce opposition to having fund boards run by independent chairmen. SEC Chairman Christopher Cox recently said that one alternative might be appointing a lead independent director, and industry insiders have indicated that the SEC might merely call having an independent chairman a "best practice."

Regulators in Utah have dropped charges of fraud and apologized for dinging the reputation of two First Western Advisors brokers, according to the Salt Lake Tribune.

PALM DESERT, Calif.-Interactive data, books and recordkeeping requirements and 12b-1 fees were a few of the key issues repeatedly discussed at the Investment Company Institute's "Mutual Funds and Investment Management Conference" here last week.

PALM DESERT, Calif.-Modernizing fund rules, remembering fundamental basics of serving investors, keeping a watchful eye on globalization of the fund industry and facing risky practices head-on were key points of Andrew Donohue's keynote speech at the Investment Company Institute's "Mutual Funds and Investment Management Conference" here last week.

The April 16 deadline for fund companies and their intermediaries to ink information-sharing agreements in compliance with Rule 22c-2 has set off a flurry of negotiations and shifted attention to the next component of the rule: data analysis.

The comment period for the independent directors rule ended a month ago, and as the Securities and Exchange Commis-sion nears a vote on the measure, speculation is increasing that it will bend to the industry's fierce opposition to having fund boards run by independent chairmen. SEC Chairman Christopher Cox recently said that one alternative might be appointing a lead independent director, and industry insiders have indicated that the SEC might merely call having an independent chairman a "best practice."

The distributor and investment advisor for the Franklin Templeton family of mutual funds has agreed to pay $20 million to settle charges that they made ill use of brokerage commissions.

Fidelity Investments is gearing up for a fight with federal regulators now questioning a business relationship between a pair of siblings who handle a fraction of the fund giant's trading business. Fidelity trader David K. Donovan and his younger brother, Peter Donovan, an employee of Bank of American Securities, are under investigation for forging an improper business relationship, attorneys close to the case told The Boston Globe last week.

Say it ain't so, Fido.

The largest scandal in the mutual fund industry's 80-year history has prompted regulators to revamp how funds conduct business by implementing a series of reforms. Dozens of firms have been sued and accused of fraud, a handful of executives are facing criminal charges and investors have realized how little they really know about how their retirement dollars are being invested.

First Command Financial Services, a leading seller of financial products to military personnel, agreed last Wednesday to pay $12 million to settle allegations that it used shady sales practices to pitch mutual funds to thousands of enlisted men and women over the last five years.