Mutual funds

Edward Jones to Pay $7.5M for Revenue Sharing

Identity theft, data loss and other privacy violations are among the leading threats faced by financial institutions. Depending on their nature, they can inflict reputational and brand damage, cause revenue losses and prompt civil liability suits by customers. What's more, regulators are taking an increasingly hard line in these matters. Two new regulatory measures to safeguard investor privacy have far-reaching implications for investment companies, and executives need to take steps to comply.

The Securities and Exchange Commission plans to propose as early as the end of the month rules that would enhance municipal disclosure, SEC Chairman Christopher Cox said in an interview.

Let us hope that New York Mayor Michael Bloomberg is correct in the words he spoke at Ground Zero last Thursday, the seventh anniversary of the tragic terrorist attacks in New York and Washington. The date 9/11, Bloomberg said, "lives forever in our hearts and our history, a tragedy that unites us in a common memory and a common story, the day that began like any other and ended as none ever has."

Financial services, insurance, and real estate businessesí hiring plans for the fourth quarter are the weakest they have been in 16 years, a survey by Manpower found.

Legg Mason Taps Odenath To Head Up the Americas

Target-date funds, also known as lifecycle funds, are rapidly rising in 401(k) plans as the favorite qualified default investment alternative because they're much more appropriate than the traditional money market fund for hands-off investors.

Americans have changing needs for retirement products as they grow older, and mutual fund companies that recognize and respect the differences between the age groups can be much more effective.

Market unrest, the credit crisis and an updated FAS 157 are prompting mutual fund companies to be more meticulous about fair value pricing, Deloitte reported Monday in its “2008 Fair Value Pricing Survey,” its seventh annual such report.

With Lehman Brothers filing for Chapter 11 bankruptcy protection, investors are fearful their holdings could be decimated, but regulators have been stepping in to reassure them that their mutual fund and brokerage accounts are safe, The Wall Street Journal reports. The Securities and Exchange Commission said that some of its staff were working within Lehman’s offices to ensure customer accounts are protected.

John Thain, chief executive officer of Merrill Lynch, said the reaction of his firm’s “thundering herd” of more than 16,000 financial advisers to the Bank of America sale has been almost 100% positive.

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.

Neil Bathon, who founded Financial Research Corp. in 1987, has now formed a new investment management research firm, FUSE Research Network. Bathon said the information he will provide investment management distributors will be “actionable.” “With FUSE, our goal is not to produce information, but to assist clients to enact change by providing implementation support based upon the insights we derive through our research efforts,” Bathon said. “There are any number of providers who offer interesting data books and reports. Our research is designed to fill a higher spot on the value scale by delivering tangible, actionable guidance.” Joining Bathon in running the company is former FRC President Michael Evans. “I’m very pleased to be reconnecting with Neil at FUSE,” Evans said. “We firmly believe in our ability to convert marketplace knowledge into tangible results on the behalf of our clients. Many of the traditional information providers have not kept pace with changing needs of asset managers. The service offerings of FUSE will provide clients with the next generation of research support through the practical application of knowledge.”

Fidelity will buy back $300 million worth of auction-rate securities from its brokerage customers, according to the Associated Press, citing an individual close to the talks. In so doing, it will settle an investigation by New York Attorney General Andrew Cuomo, and the announcement could possibly be made this afternoon.

Janus Twenty Fund manager Ron Sachs must be ruing purchasing nearly 10 million shares in Lehman Brothers, now that the company is either on the brink of collapse or a fire sale, the Rocky Mountain News reports. The stock is down nearly 80% since the beginning of June.

Bruce Bent, chairman of The Reserve and the creator of the first money market mutual fund, is breaking from the pack that has been critical of the Securities and Exchange Commission’s proposal of the rule governing money funds to lessen their reliance on credit rating agencies, Dow Jones reports.

Financial services, insurance, and real estate businesses’ hiring plans for the fourth quarter are the weakest they have been in 16 years, as a result of a contracting banking sector and the slumping housing market, a survey by Manpower found.

Although unemployment and inflation have been higher in the past 30 years, a majority of people age 60 or older have a very pessimistic outlook, according to a poll by the MetLife Mature Market Institute.

With Japanese households worth more than $14 trillion, and half of that in cash or postal accounts, Manulife Financial Corp. has decided to enter the nation’s mutual fund market.

Edward Jones will pay $7.5 million to California to settle claims that it failed to disclose its revenue-sharing policies to investors. Although it earlier denied the attorney general’s charges, in settling, the firm neither admitted to nor denied the allegations.