Mutual funds

The Securities and Exchange Commission issued an enforcement action Tuesday against AmSouth Bank and AmSouth Asset Management for defrauding the AmSouth mutual funds by using a portion of administrative fees that shareholders paid for marketing and other unrelated expenses that should have been paid out of the investment advisor’s coffers. Those expenses included the salary, bonus, benefits and country club membership of the president of the AmSouth Funds.

Minnesota U.S. District Court Judge Paul Magnuson has decided to expedite Ameriprise Financial’s lawsuit against Reserve Funds’ Primary Fund. The court will fast-track the discovery of documents and other supporting information.

The Securities and Exchange Commission is planning its next CCOutreach seminar for Nov. 13 at its Washington headquarters.

Sallie Krawcheck, the chief executive officer and chairman of Citi Global Wealth Management, is set to leave the firm, according to a statement from Citigroup, the parent company.

The labor supply may experience shortages in coming years as more Baby Boomers retire, according to a study by KPMG.

FRC Founder Bathon Forms New Company

Former Prudential Broker Pleads Guilty to Timing

Shareholders filed a lawsuit in U.S. District Court in Manhattan against Reserve Funds' Primary Fund for halting redemption of holdings of $10,000 or more on Tuesday due to the fund falling to 97 cents on the dollar.

Investors began a run on The Reserve's Primary Fund last Monday when Lehman's bankruptcy news made them fearful about the money market funds' $785 million exposure to the investment bank's previously blue-chip commercial paper and medium-term notes that had fallen to zero value.

Fidelity Investments reached agreements with New York and Massachusetts officials to buy back at par $300 million of auction-rate securities from its customers by the end of the year, becoming the first retail brokerage firm to settle alleged fraudulent sales practices in the ARS market.

Expect a pop in equity valuations, increased liquidity and lower trading costs as U.S. and foreign corporations list stocks using International Financial Reporting Standards (IFRS). That's according to a working paper published by the University Of Chicago Graduate School Of Business.

CHICAGO - In the coming weeks and months, financial officials and members of Congress will be scrambling to revisit a spate of sunsetting tax and accounting laws before the new presidential administration and Congress take over next year.

Fifty-five brokers with a combined $7 billion in assets under management that have left wirehouses to form their own independent registered investment advisory firm have selected Fidelity as their custodian in the first six months of this year. This is double the new assets Fidelity attracted from breakaway clients in 2007.

The turmoil in the financial industry and markets in recent days has caused serious anxiety among retirees or near-retirees, as they have seen their savings plummet in recent days, The Wall Street Journal reports.

Global insurance giant AIG sold more than $10.8 billion worth of annuities in the second quarter of 2008—more than any other insurer—and Lehman Brothers’ Neuberger Berman mutual funds managed more than $250 billion.

Bowing into pressure from banks and thrifts, the Department of the Treasury clarified its promise to guarantee money market mutual funds late Sunday. The government will insure money market mutual funds’ $1 net asset value for a year for investments in funds as of close of business last Friday.

Given the tremendous market turbulence of the past week, AMG Data Services data through Wednesday shows mutual fund investors holding steady.

The phone lines were jammed at financial advisers’ offices throughout the week as average investors called to find out just what the heck was happening on Wall Street.

The U.S. Treasury Department announced early Friday it has set aside $50 billion from The Exchange Stabilization Fund to insure that no fund in the $3.4 trillion money market fund industry “breaks the buck” for the next year.

Putnam Investments announced Thursday that it was liquidating the institutional Putnam Prime Money Market Fund and distributing the fund’s $15 billion in assets due to marketwide liquidity issues and high redemptions on Wednesday, rather than to exposure to uncreditworthy investments in AIG, Lehman Brothers or Washington Mutual.