Money Management Executive articles from February 2005

Money Management Executive archives from February 2005

Galvin Sues A.G. Edwards For Huge' Market Timing.(William Galvin)(A.G. Edwards Inc.)(Brief Article)
February 7, 2005... Massachusetts Secretary of the Commonwealth William Galvin last Tuesday sued A.G. Edwards for allowing at least one of its representatives to market time mutual funds on behalf of two offshore hedge funds. One of the fund's market-timing trades...

Market Timing at Putnam Now Put at $100 Million.(Putnam Investments Inc.)(Brief Article)
February 7, 2005... An independent consultant said that rapid in-and-out trading in mutual funds at Putnam Investments cost investors as much as $100 million, a figure that is 10 times the previous estimate of damages. Regulators appointed Harvard Business...

Managed Account Assets Surge Nearly 16% in 2004 To Reach $576.1 Billion.(Brief Article)
February 7, 2005... Separately managed accounts witnessed strong growth again in 2004, as assets under management grew by 15.9% to $576.1 billion, the Money Management Institute reported. MMI predicts that number will reach $1.3 trillion by 2008, primarily due to...

Marsh Pays $850M for Ripping Off Customers: Offers Mea Culpa for Bid-Rigging, Kickbacks.(Marsh and McLennan Companies Inc.)
February 7, 2005... Marsh & McLennan, the nation's largest insurance broker, last week agreed to an $850 million settlement with New York Attorney General Eliot Spitzer for conspiring to rig insurance bids and steer business to preferred insurers in exchange for...

It's Full Steam Ahead for Revenue Sharing: Disclosure Not Expected to Dampen Key Sales Device.(Securities and Exchange Commission considers point of sale disclosure forms)
February 7, 2005... The Securities and Exchange Commission is considering point-of-sale disclosure forms that would reveal to investors any revenue sharing or conflicts of interest between broker/agents and mutual fund companies. While fund executives may worry...

Mass. Pension Halts New Money for Fidelity: Demands Hard Evidence in Trader Gift Probe.(Massachusetts Pensions Reserve Investment Management Board)(Fidelity Investments)
February 7, 2005... The Massachusetts state pension board announced last week that it will not invest any new money in Fidelity Investments, reprimanding the world's largest fund company for the manner in which it has responded to the board's questions regarding a...

SEC Drafts Rule to Reveal Fund Transaction Costs.(Securities and Exchange Commission)(Brief Article)
February 7, 2005... The Securities and Exchange Commission is drafting a proposal that would offer mutual fund investors more information on how much their funds spend to buy and sell securities. Working in tandem with the NASD, the proposal would push for a...

Citigroup May be Charged Over Transfer Agency Fees.(Brief Article)
February 7, 2005... Citigroup has announced that the Securities and Exchange Commission may recommend a civil injunction and/or administrative proceedings against Citigroup Asset Management, Citicorp Trust Bank, former asset management unit CEO Thomas Jones and...

Executive Moves.(Christian W. Thwaites appointed as chief executive officer of Skandia Global Funds)
February 7, 2005... Thwaites Joins National Life To Head Mutual Fund Unit Christian W. Thwaites, who had served as the chief executive officer of Skandia Global Funds since 2001, has left the company to become CEO of National Life Group's investment arm, which...

AARP Pledges Vigorous Defense of Social Security: Wall Street's Gain Will Be Slim, Experts Say.
February 7, 2005... Before President Bush could even fire the first official volleys of his campaign to reform Social Security during last week's State of the Union, AARP, the nation's leading defender of the fund, was mobilizing its troops in vigorous opposition....

Securities, Research Settlements on Fund Companies' Radar.
February 7, 2005... The Securities and Exchange Commission released monetary distribution details for the sweeping $1.4 billion research settlement last week, indicating how mutual fund advisors can recoup losses in companies that Wall Street analysts unabashedly...

London Hedge Fund Might Be Fined in Edwards Case.(Headstart Asset Management)(A.G. Edwards Inc.)(Brief Article)
February 14, 2005... Owing to an indemnity letter it provided to its U.S. broker, A.G. Edwards, London-based hedge fund manager Headstart Asset Management reportedly may have to pay up for losses caused to U.S. mutual fund shareholders resulting from nearly $2...

Mass. Regulator Hires Putnam Whistleblower In Corporate Registry Unit.(Peter Scannell)(William Galvin)(Brief Article)
February 14, 2005... Peter Scannell, the whistleblower who helped take down Putnam Investments, has resurfaced, having secured a job with the securities regulator who first charged the mutual fund company with fraud. Scannell, a former employee at Putnam's call...

Correction.(Correction Notice)
February 14, 2005... In a Jan. 31 story about internal wholesalers, 13-year-old Investors Capital Corp. was incorrectly identified. Also, portfolio manager Tom Cameron helped launch the Eastern Point Advisors Rising Dividend Growth Fund in 2004. The firm's first...

SEC Tags Another Advisor for Overcharging: Accuses Second Firm of Excessive Performance-Based Fees.(Securities and Exchange Commission)(Accessor Capital Management)
February 14, 2005... Accessor Capital Management of Seattle is now the second firm the Securities and Exchange Commission has targeted for miscalculating its mutual fund performance-based management fees. In addition, several other investment managers that have...

Former Columbia Execs Face Fraud Charges: Bank of America Closes Book on $675M Settlement.(Columbia Bancorp.)
February 14, 2005... Federal regulators on Wednesday filed civil fraud charges against two former FleetBoston Financial executives, alleging the duo allowed preferred customers to engage in abusive mutual-fund trading practices at the expense of its long-term fund...

Morningstar IPO Activity Stirs Amid Probes: Fund Researcher to be Listed on Nasdaq.(Initial Public Offering)
February 14, 2005... Morningstar said in a recent regulatory filing it has chosen a ticker symbol for its initial public offering, suggesting that it might finally be ready to bring shares to market after months of delays. In a Feb 3. S-1A filing with the...

Eaton Vance Named Best Stock of Last 25 Years.(Eaton Vance Corp.)(Brief Article)
February 14, 2005... In news that surprised even the most astute investment business insiders, Eaton Vance has been crowned the No. 1 publicly traded stock in the last 25 years. According to FactSet Research Systems, Eaton Vance's annualized return of 32% since...

Massachusetts Democrats Bash Privatization Plan.(Brief Article)
February 14, 2005... Congressional Democrats from Massachusetts, a state that many leading money management firms call home, are unifying in opposition to the Bush Administration's proposal to route a portion of Social Security into mutual funds. Although they...

Executive Moves.(appointments in mutual fund industry)
February 14, 2005... Hancock Names Knox VP, Chief Compliance Officer John Hancock has named Frank Knox vice president and chief compliance officer of its John Hancock Investment Company Operations wing. In this position, Knox is in charge of handling compliance...

St. Paul Considers Nuveen Divestiture: IPO of Closed-End Fund Specialist Likely.(St. Paul Travelers Cos.)(Nuveen Investments)(Initial Public Offering )
February 14, 2005... St. Paul Travelers Cos., Minnesota's largest insurer and the 13th largest in the U.S., wants to divest its majority stake in Nuveen Investments. But unlike other major financial companies like Citigroup and American Express that are now hoping...

TIAA-CREF to Examine Ownership of Funds by Directors: Upcoming Study Will Also Look at Revenue Sharing's Impact on Performance.(Teachers Insurance and Annuity Association - College Retirement Equities Fund)
February 14, 2005... While the mutual fund industry wrangles with the upcoming independent chairman rule, TIAA-CREF has commissioned a study that will look at two other fund governance issues that have escaped regulators' attention: whether ownership of a fund by...

Only 34% See Need for Independent Chairmen.(poll results by Diversified Management Resources )(Brief Article)
February 14, 2005... An informal poll by Diversified Management Resources (DMR) of Belmont, Mass., shows that few mutual fund executives, only 34%, believe that all fund boards should have independent chairmen. Investment professionals are also evenly divided over...

SEC, NASD Examine Gifts Exchanged With Lazard.(Securities and Exchange Commission)(Brief Article)
February 21, 2005... Investment bank Lazard has revealed that the Securities and Exchange Commission and NASD are investigating gifts and gratuities it gave and received. The company stated in the amended prospectus for its planned $850 million initial public...

Asset Allocation Funds Absorb 2/3 of Flows in 04.(Brief Article)
February 21, 2005... Investors are diversifying and how. More than two-thirds of stock and bond net inflows in 2004 were part of a structured asset allocation program, according to research firm Strategic Insight. The trend of diversifying across asset classes...

Funds to Begin Disclosing Manager Compensation.(Brief Article)
February 21, 2005... Beginning next Monday, funds will begin complying with a new Securities and Exchange Commission requirement that they must disclose how they structure portfolio managers' compensation and how much these fund skippers have invested in the funds...

Adviser Closes Registered Hedge Funds: Registered Hedge Funds-of-Funds Seeing Challenges.
February 21, 2005... In a move that may indicate investment advisors are rethinking their footing within the registered hedge funds-of-funds marketplace, Aspen Strategic Alliances (ASA) of Atlanta, advisor to four hedge funds-of-funds that commenced operations less...

BlackBerry Addiction a Welcome Addition: Fund Wholesalers Tap Handheld Resources.
February 21, 2005... Jim Stueve is a habitual "Crackberry" user and has no problem admitting his addiction. As director of retail sales for Houston-based fund manager AIM Investments, he craves the instant messaging capabilities and seemingly endless flow of...

Sales Focus Shifts to Key Accounts, Partners.
February 21, 2005... As far as improving mutual fund distribution is concerned, consider the typical odds: the average asset manager's external wholesale team is made up of 40 individuals, and if they conduct roughly 20 meetings a week, they can reach about 8,000...

Sponsors to Begin Offering Roth 401(k) Accounts.(Brief Article)
February 21, 2005... Workers saving for retirement through their companies' 401(k) plans may have a new tool at their disposal: Roth 401(k) accounts, which companies are likely to roll out next year. A Roth 401(k) works just like a Roth individual retirement...

Edward Jones Airs Video On Social Security Reform.(securities industry)(Brief Article)
February 21, 2005... Edward Jones is airing a 33-minute video to its six million clients across the country that outlines President Bush's plan for Social Security reform, but the brokerage giant stops short of publicly endorsing a specific solution. Titled "The...

Executive Moves.(American AAdvantage Funds)(Deutsche Bank Private Wealth Management)
February 21, 2005... RS Investments Promotes Davis to Portfolio Manager MacKenzie Davis, who has been at RS Investments since March 2004, has been promoted from analyst of the RS Global Natural Resources Fund to a co-portfolio manager of the fund, a position...

Goldman Plans to Boost Fund Business Through Banks.
February 21, 2005... Goldman Sachs Asset Management plans to expand its mutual fund business by acquiring small fund families from banks looking to quit the proprietary fund business. The New York financial services company last year announced the purchase of...

Plan Administrators to Play Key Role in Settlement Payouts.
February 21, 2005... More than a dozen major mutual fund providers and investment advisors have settled with federal and state regulators over market-timing and late-trading practices and set aside money to reimburse investors. For plan sponsors and administrators,...

NASD to Continue to Focus on Mutual Fund Sales.(National Association of Securities Dealers)
February 21, 2005... The NASD may have initiated fewer disciplinary actions last year, but the size of its fines got a lot bigger, it pressed a record number of cases against improper fund sales and trading, and its interest in mutual fund sales practices will...

Do You Know This Rep?(representatives)(securities industry)
February 21, 2005... The NASD lists its total number of registered representatives as approximately 660,000. The annual turnover rate of representatives in the securities industry, according to the Securities Industry Association, is about 19%. With such...

Smart' Mutual Funds to Seek More Independent Research: Soft-Dollar Disclosure Could Lead to Unbundled Future.
February 21, 2005... For BNY Jaywalk, a subsidiary of the Bank of New York, the recent move from its midtown Manhattan location to the bank's storied offices at One Wall Street was more than a validation of the division's enhanced importance at the bank. Jaywalk's...

Health Savings Accounts Poised for Growth.
February 21, 2005... Spiraling health-care costs are a fact of life for many American businesses and workers. Premiums for employer-sponsored health plans have risen 10% or more annually over the last several years. Faced with an aging workforce, a sluggish...

American Express Financial Pursues Mass Affluent.
February 21, 2005... The so-called mass affluent hold an enormous share of U.S. investing wealth, at last count some $6 trillion in assets. As the Baby Boomers age, the mass-affluent population and its wealth are growing. American Express Financial Advisors (AEFA)...

How Boards, CCOs Can Take the New Compliance Era in Stride.(chief compliance officer)
February 21, 2005... No one yet knows exactly how Securities and Exchange Commission Rule 38a-1 affecting mutual fund compliance will be enforced in years to come. The SEC is bound to offer clarification and guidance as time goes on, but funds must take steps now...

Quick & Reilly, Piper Fined: For Directed Brokerage.(Brief Article)
February 28, 2005... The NASD has fined the former Quick & Reilly, now a member of the Banc of America Investment Services family, $570,000 for directed-brokerage violations. In addition, NASD imposed a $275,000 fine on Piper Jaffray for similar abuses. The Piper...

New Hampshire Sues Amex for Sales Contests.(Brief Article)
February 28, 2005... The financial advisory unit of American Express violated its fiduciary duty to clients by providing secret incentives to its sales force to sell poorly performing in-house mutual funds, New Hampshire regulators allege. American Express...

After Tumultuous Period, Roye Departs SEC: Search in the Hands' of Chairman Donaldson.(Paul Roye)(William Donaldson)
February 28, 2005... Paul Roye, director of the investment management division at the Securities and Exchange Commission, ended nearly a year of speculation on Feb. 18 by announcing that he'll step down as the mutual fund industry's top regulator. The news...

Fund CCOs Grapple with Undefined Role.(Chief Compliance Officer )
February 28, 2005... MIAMI - Chief compliance officers at mutual fund shops are finding out that defining their responsibilities takes a lot of guesswork. The very broad nature of the new compliance rule implemented last Oct. 5 has left newly appointed fund...

Execs Face the Membership' at NICSA.(National Investment Company Services Association)
February 28, 2005... A heightened regulatory environment has forever changed the $8 trillion mutual fund industry, as the fallout from a wave of scandal has had a significant impact on its various operating facets, a reality that has put its member firms at the...

Sihpol Likely to Face Trial As Boss, Bryceland, Walks.(Theodore Sihpol, Jr)(Charles Bryceland)(Brief Article)
February 28, 2005... United States District Judge Andre M. Davis dismissed all remaining civil charges last week against former Bank of America executive Charles Bryceland on mutual fund timing and late trading. Although the Securities and Exchange Commission, NASD...

Merger, Buyout Seen as Putnam Spinoff Possibilities.(Brief Article)
February 28, 2005... Speculation that Marsh & McLennan might spin off its scandal-plagued Putnam Investments unit continues, with a report last week that a sale, merger or management buyout are all possibilities. The fact that MMC has been caught up in an $850...

E&Y to Close Advisory Services Division.(Ernst & Young)(Brief Article)
February 28, 2005... Due to what sources say are conflict of interest issues, Ernst & Young is said to be closing its financial advisory services unit, a move that would eliminate several hundred positions and leave clients scrambling. Full details of the...

Executive Moves.(Matthew Day, Timothy Highland and Russell Romberger joins Russell Investment Group )(John Adams joins Munder Capital Management)(James S. Phalen joins State Street)
February 28, 2005... Russell Taps Romberger, Highland, Day as Directors Multi-manager investment firm Russell Investment Group has hired three new regional directors in charge of working with registered investment advisers: Matthew Day, Timothy Highland and...

Domestic Equity Funds Suffer $2.8B in Outflows in January.
February 28, 2005... Investors poured $4.5 billion into equity funds during January, more than a $7 billion drop from December, according to Lipper of New York. Domestic stock funds were hit hard, but exchange-traded funds experienced a significant milestone. ...

Strong-Performing, Low-Cost 529 Plans Score Top Ratings.
February 28, 2005... What's the recipe for a great 529 college savings plan? According to Investforcollege.com of Williamsburg, Va., which today releases its 2005 quantitative 529 plan ratings, great plans encompass great fund performance and reasonable costs,...

New IDC Guidelines Encourage Board Activism: Recommendations Reflect Reform Movement.(Independent Directors Council)
February 28, 2005... The Independent Directors Council has just released a task force report on how mutual fund boards might best approach self-evaluation, an annual checkup that will become mandatory next year, and while the 28-page document stops short of issuing...

Vanguard Chief Outlines Success Factors for Funds.(Brief Article)
February 28, 2005... MIAMI- Jack Brennan, chairman and chief executive of the Vanguard Group, blasted rival investment products such as hedge funds and separately managed accounts last Monday and defended the mutual fund industry against mounting criticism. ...