Law and regulation

Eighty-percent of board members at financial services firms believe they need better tools to evaluate investments, PricewaterhouseCoopers’ financial services practice found in a recent survey of financial services audit committee members. They believe that by being better equipped, they could reduce the chance of future industry instability.

The Financial Industry Regulatory Authority has fined Banorte Securities International $1.1 million for improper sales of B shares of offshore mutual funds, as well as inadequate supervisory systems to monitor the sales.

WASHINGTON - Though the Federal Reserve Board's reputation is built on its management of monetary policy, Chairman Ben Bernanke said Wednesday that the role of banking supervision at the central bank needs to be revisited.

HUNTINGTON BEACH, Calif. - As omnibus accounts continue to grow in size and scope, it remains crucial for investment managers to keep oversight high and costs low.

HUNTINGTON BEACH, Calif. - Mutual fund industry leaders admit that years of deregulation allowed the current economic crisis to unfold, and many are anticipating a backlash of new and excessive regulations to result.

The mutual fund industry has a long tradition of innovation and creative problem solving in times of challenge. These past months have been sobering, and the uncertainty around the financial services sector is not yet waning.

As the mutual fund industry approaches the first anniversary of the compliance date for SEC Rule 22c-2, it's an ideal time for a retrospective on the services, systems and processes in place to comply with the data-sharing components of the rule.

Fidelity Investments' institutional wealth management arm is ratcheting up its pursuit of financial advisers and wealth managers who want to run their own shops.

With just $6 billion in assets left, of what once totaled $83 billion, Reserve Management is liquidating its 18 remaining funds.

The U.S. Justice Department has subpoenaed several large firms and agencies as part of an investigation to determine whether Lehman Brothers Holdings Inc. misled investors before its Sept. 15 bankruptcy filing, according to the Stamford Advocate.

Putnam Investments has named Jeffrey R. Carney as the new senior managing director and head of global marketing and products, effective Oct. 27.

CHICAGO - When it comes to choosing derivative instruments, some portfolio managers still think the more complicated they are, the better.

Investors in the now-defunct Primary Fund got their first indication of when they can expect redemptions last Monday, when Reserve Management announced it would return 32% of the fund's assets as of Sept. 15, or $20 billion, on Oct. 13.

In response to scrutiny over its ratings of instruments tied to subprime mortgages, Fitch Ratings has increased its own scrutiny over fund of hedge fund managers, warning that many such funds may not be able to meet redemption requirements if their risks are not closely monitored.

The Reserve will liquidate its Primary Fund and begin returning cash to shareholders, according to an announcement on Monday.

On Monday and Tuesday, immediately after the government announced the opening of its $50 billion insurance program for money market funds, at least eight major fund companies had signed up, including BlackRock, Dreyfus, Evergreen, Federated, Invesco AIM, Morgan Stanley, TCW and Legg Mason’s Western Asset Management.

Evergreen Investments announced Tuesday that its parent, Wachovia Corp., will purchase Lehman Brothers debt held in three of its money market mutual funds: the Evergreen Money Market Fund, Evergreen Institutional Money Market Fund and Evergreen Prime Cash Management Fund.

Private equity firms Bain Capital Partners and Hellman & Friedman acquired Neuberger Berman Monday for $2.15 billion, with the two firms holding equal positions in Neuberger, the firm’s portfolio managers given a “significant stake” and the deal expected to close early next year.

Many hedge funds will have trouble retaining top managers next year, thanks to terrible market performance across the board and a reward system based on that performance, The Wall Street Journal reports. To retain talent, they will have to tap into profits. Otherwise, they will have to close shop.

Recent moves by the U.S. government to prop up ailing money market funds seems to be helping stem the recent massive run on the funds, another fund implosion like the Reserve's Primary Fund can't be ruled out; managers may be holding investments that turn out to be worthless.