Relaxation of Sarbanes-Oxley audit and reporting rules passed unanimously by the Securities and Exchange Commission last month may address the burdensome compliance costs of the law that companies-especially small ones-complained about, but it probably won't be enough to reverse the small-cap slide.

While we will certainly give credit to Eliot "The Steamroller" Spitzer for taking on illicit trading and sales activities in the mutual fund industry while he was New York attorney general, we wondered why, when he was running for governor, he accepted hundreds of thousands of dollars from hedge funds, which, after all, were at the heart of the scandal. It's entirely possible some of the funds that showered Spitzer with money conducted market timing or late trading. That would make his acceptance of their contributions a serious conflict of interest and, possibly, a tacit agreement not to indict them.

Citigroup's Smith Barney division has agreed to pay $50 million to settle market-timing charges by the New York Stock Exchange and New Jersey regulators. Of the $50 million total, $40 million will go to investors who were harmed by the activity.

While we will certainly give credit to Eliot "The Steamroller" Spitzer for taking on illicit trading and sales activities in the mutual fund industry while he was New York attorney general, we wondered why, when he was running for governor, he accepted hundreds of thousands of dollars from hedge funds, which, after all, were at the heart of the scandal. It's entirely possible some of the funds that showered Spitzer with money conducted market timing or late trading. That would make his acceptance of their contributions a serious conflict of interest and, possibly, a tacit agreement not to indict them.

Despite a recent survey that found 83% of executives believe that the Sarbanes-Oxley Act has had a positive impact on their company, industry experts do not agree.

Lake Shore Asset Management, a Chicago-based hedge fund, had $288 million of its assets frozen by a federal court last week, after regulators stated it overstated its holdings, according to Bloomberg News.

John Hancock has settled with the Securities and Exchange Commission on charges that it failed to disclose $14.8 million in revenue-sharing agreements with 55 brokerages between 2001 and 2004. In exchange for the payments, the brokerages promoted Hancock mutual funds and variable annuities and gave the investment management firm's marketing and sales staff access to their representatives at conferences and meetings.

Increased international competition, proxy votes and Sarbanes-Oxley were a few of the issues discussed during the House Financial Services Committee's review last week of the Securities and Exchange Commission's effectiveness in investor protection and market oversight.

After a day's worth of discussion among industry executives, regulators, academics and investor advocates about the utility and future of 12b-1 fees, one theme emerged: something should be done.

Despite the hurly-burly set off by Securities and Exchange Commission Chairman Christopher Cox's request that Congress eliminate soft-dollar safe harbors, industry insiders argue that such a change will result in nothing but toil and trouble for retail investors.

The NASD collected roughly half the amount of fines in 2006 compared to 2005, taking in $84.9 million in 2006, compared to $134.3 million in 2005, according to its annual report. The NASD issued another $75 million in fines in 2006, compared to $148.5 million in 2005.

Regulation continues to weigh on fund executives' minds as their number-one concern, according to a PricewaterhouseCoopers survey of 400 senior finance executives at a forum last month.

The Securities and Exchange Commission announced that BISYS Group is paying $25 million in disgorgement and interest to settle charges of violating financial reporting, books and records and internal control provisions of the Securities Exchange Act of 1934.

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.