Money Management Executive articles from March 2005

Money Management Executive archives from March 2005

Illinois Pressures Bear For Market-Timing Evidence.
March 7, 2005... Securities regulators in Illinois are pressuring Bear Stearns to turn over documents that contain proof of market-timing improprieties, it was reported last week. Illinois sent a notice to the firm on Feb. 10 asking its executives to appear...

Scandal Crests, But is Hardly Over.
March 7, 2005... On Sept. 3, 2003, Canary Capital came clean over its market-timing and late-trading abuses. Now, nineteen months, four days and billions of dollars in penalties later, regulators continue to uncover malfeasance in a scandal that never seems to...

ICI Study Refuels 12b-1 Debate.(Investment Company Institute)
March 7, 2005... No cocktail party conversation about mutual fund reform would be complete without a discussion of the future of rule 12b-1. Despite having originally been intended to help no-load funds finance their advertising and marketing campaigns, the...

SEC Allows Fund Boards to Set Timing Curbs: Brokers to be Held Liable Under New Contracts.(Securities and Exchange Commission)
March 7, 2005... The Securities and Exchange Commission Thursday approved a new rule to combat market timing that would leave the decision to impose redemption fees on mutual funds up to the board of directors and allow funds to hold intermediaries more...

Alliance Makeover Focuses Distribution on Key Agents.(Alliance Capital Management L.P. and Alliance Bernstein )(Brief Article)
March 7, 2005... MIAMI - Having put the pain of a pervasive trading scandal behind it, Alliance Capital Management and its mutual fund subsidiary Alliance Bernstein are focused on carving out market share and winning new clients by retooling their distribution...

Fidelity Earnings Up 23% As it Adds 21,000 Advisers.(Fidelity Investments)(Brief Article)
March 7, 2005... Led by favorable stock market activity and a reputation still unmarked by the scandal, Fidelity Investments witnessed a 23% surge in net income in 2004. Profits at Boston-based Fidelity rose to $1.1 billion in 2004, versus $908 million in 2003,...

Experts Propose Fund Fixes Rooted in Stronger Scruples.(Jack Bogle, Mercer Bullard and Don Phillips)
March 7, 2005... Amid the ongoing furor over the mutual fund trading scandal, three fund luminaries, , Jack Bogle, Mercer Bullard and Don Phillips, weighed in with Morningstar on what reforms the industry needs to embrace to fix its inherent flaws. The...

Revenue Sharing Sordid' But Essential: Morningstar.(Brief Article)
March 7, 2005... Even though revenue-sharing payments come out of a fund's own coffers, the common practice hurts investors because of the bias it creates, attests Morningstar columnist Eric Jacobson. "The reality is that fund companies pay up for precious...

Executive Moves.(Fidelity Investments promoted Rob Strickland, AIM Investments appoints Andrew Laster, Russell Investment Group appoints Whitney Dow )
March 7, 2005... Fidelity Names Strickland President of Canadian Firm Fidelity Investments has promoted Rob Strickland, executive vice president of adviser and alliance distribution in Canada for the past two years, to president of Fidelity Investments...

Fidelity, Vanguard Spar Over Index Fee Cuts: E*Trade, Meanwhile, Sneaks in By Undercutting Both.(Fidelity Investments and E*Trade Financial Corp.)
March 7, 2005... Who's got the lowest cost index funds? Get your index fund expense ratio scorecard ready. Last Tuesday, Fidelity Investments officially announced that the voluntary expense caps it had installed on four of its U.S. domestic index funds...

Quiet Reception Greets New Janus Funds.(Janus Triton and Janus Research funds)
March 7, 2005... Wearied in recent years by a bear market and the market-timing and late-trading scandal, Janus Capital is introducing two new funds that could finally signal a turnaround for the onetime fund giant and a departure from its reputation for...

Merrill Lynch Pays $13.5M To Settle Timing Charges.
March 14, 2005... Merrill Lynch has reached a $13.5 million joint settlement with state regulators and the New York Stock Exchange over charges that it failed to supervise a group of financial advisers who engaged in abusive market timing of the firm's mutual...

AFL-CIO Pressures Funds Over Privatization Scheme.
March 14, 2005... The national office of the AFL-CIO has persuaded Waddell & Reed to join Edward Jones in withdrawing from a lobby group that supports President Bush's proposal to reform Social Security through private accounts, and now the organized labor giant...

Janus Shuts Down Bay Isle, Axes CEO.
March 14, 2005... Janus Capital Group has shut down its Bay Isle Financial office in Oakland, Calif., and cut nearly its entire institutional money management team, including co-founder and Chief Executive Officer Bill Schaff, leaving the future of the...

Sihpol's Criminal Case Begins Next Month: Defense Will Argue Definition of Late Trading.(Theodore C. Sihpol)
March 14, 2005... To hear former Bank of America broker Theodore C. Sihpol III's account of what led to his arrest in September 2003 on charges of fraud, an event that set the entire mutual fund scandal in motion, he was an unwitting, bit player among more...

Wm. D. Witter Taps Ugolyn for New Direction.(Victor Ugolyn appointed at William D. Witter Inc.)
March 14, 2005... Victor Ugolyn, 57, the former chairman, president and CEO of Enterprise Capital Management of Atlanta, the adviser to the Enterprise Group of Funds, the proprietary fund family of insurance company Mutual of New York Group (MONY), has a brand...

State Street Wins $224B Bank of America Contract.(Boston Financial Data Services)(Brief Article)
March 14, 2005... Bank of America Corp. will outsource back-office operations for $224 billion of assets to Boston-based State Street Corp. and Boston Financial Data Services, a joint venture of State Street and DST Systems. State Street, which will now...

AIG-Huatai Begins Selling First Mutual Fund in China.(AIG-Huatai Fund Management)(Brief Article)
March 14, 2005... AIG-Huatai Fund Management, a Shanghai-based joint venture between AIG Global Investment and Huatai Securities, began selling its first mutual fund in China last Monday. The company hopes to capitalize on the long-term investment potential of...

Lipper to Buy Hedge Fund Database, News Service.
March 14, 2005... Lipper, a leading provider of mutual fund information and a wholly owned subsidiary of Reuters, announced last Tuesday that it has purchased the rights to acquire Hedgeworld and the TASS Research database. The company did not disclose the...

Fidelity Inflows Decelerate.(mutual funds)(Brief Article)
March 14, 2005... Fidelity slid in net new inflows rankings for January, according to Financial Research Corp. Fidelity's net new client investments in its stock and bond mutual funds fell from fourth place to seventh place in January, or a 77% decline to $1.24...

Executive Moves.
March 14, 2005... Putnam Shakes Up Team On Voyager, Growth Funds Putnam Investments has made investment management changes on its Putnam Voyager Fund and Putnam Growth Opportunities Fund. Kelly A. Morgan, who has been team leader and portfolio manager of...

Dreyfus Ad Campaign Focuses on Integrity, Honesty.
March 14, 2005... Top 20 fund wholesaler Dreyfus Corp. is putting the finishing touches on its first new national television advertising campaign in six years. According to company officials, the commercials, which launch March 21, take advantage of proven...

Retirement Education Spurs Higher Savings Levels.
March 14, 2005... Mounting evidence shows education can indeed help employees make better decisions to build retirement savings, including a recent survey by the TIAA-CREF Institute and North Carolina State University (NCSU). Many companies offer financial...

The Canary Tapes.(conversation of Noah Lerner with Ted Sihpol.)
March 14, 2005... Court documents reveal that before the former hedge fund Canary Capital began trading electronically with Bank of America, one of its traders, Noah Lerner, had the following conversation on May 10, 2001, with former BoA broker Ted Sihpol....

Corrections.
March 14, 2005... An article in the March 7 issue misstated the expense limitation of the Fidelity Spartan International Index Fund. Fidelity has contractually agreed to limit fund expenses to 20 basis points, but will voluntarily absorb expenses above 10 basis...

Alliance, NASD in Talks Over Directed Brokerage.(Alliance Capital Management Holding L.P., Alliance Capital Management L.P., National Association of Securities Dealers)(Brief Article)
March 21, 2005... Alliance Capital Management Holding and Alliance Capital Management have entered into settlement discussions with the National Association of Securities Dealers about previous sales practices and disclosures concerning directed-brokerage...

NASD Hits Jefferson Pilot In First VUL Timing Case.(variable universal life)(National Association of Securities Dealers, Jefferson Pilot Variable Corp., Jefferson Pilot Securities Corp.)(Brief Article)
March 21, 2005... The NASD has brought its first market-timing case involving variable universal life (VUL) policies. The organization has charged Jefferson Pilot Variable Corp. (JPVC) for "failing to have an adequate supervisory system in place to prevent...

Fidelity Adds Annuities to Lifecycle Fund Lineup.(Fidelity Investments)(Brief Article)
March 21, 2005... Fidelity Investments has launched the Variable Insurance Product Freedom Funds, a series of seven lifecycle funds-of-funds that help investors choose an asset allocation strategy based on their stage in life and their expected retirement date....

N.J. Revokes Licenses In Merrill Timing Suit.(New Jersey, Merrill Lynch and Company Inc.)(Brief Article)
March 21, 2005... New Jersey regulators last Tuesday revoked the licenses of three former Merrill Lynch brokers accused of fraud for conspiring with a hedge fund to make tens of thousands of market-timing trades netting $60 million for the fund. Peter...

SEC Alumni Call for an End to Regulatory Binge: Seek Less Rulemaking, More Prosecutions.(Securities and Exchange Commission)
March 21, 2005... PALM DESERT, Calif. - Perhaps nobody captured the current mood of the mutual fund business better than Barry Barbash, a former Securities and Exchange Commission investment management director, when he told industry executives attending the...

SEC Pledges Support for CCO Post: Outreach Effort Abates Fear of a Rat Squad.(Securities and Exchange Commission, chief compliance officers)
March 21, 2005... The Securities and Exchange Commission has been soft-pedaling its expectations for mutual fund chief compliance officers recently in an effort to alleviate concerns that its new compliance rule would effectively make them a junior police squad...

ETF Sales Grow Rapidly as Sellers Dwindle: Barclays Global Continues to Dominate Sizzling Space.(exchange-traded funds, Vanguard Vipers, Barclays Global Investors)
March 21, 2005... Sales of exchange-traded funds have grown rapidly in the past three years, but the number of companies manufacturing them in the United States shrank to seven last year and is unlikely to grow, market participants said. Three of the seven...

Janus Predicts Turnaround By Year-End Via Returns.(Janus Capital Group Inc.)(Brief Article)
March 21, 2005... Despite suffering massive outflows in recent years, Janus Capital Group's chief investment officer, Gary Black, is confident that the company will deliver the sound performance necessary for the firm to make a turnaround by year-end. Janus...

Investors Plan Timing Case Against Mutual Fund Firms.(Brief Article)
March 21, 2005... In the latest development in a number of civil lawsuits nationwide, where mutual fund investors are alleging that several fund companies allowed improper trading, a federal judge last week lifted the ban on plaintiffs from using documents that...

Putnam Probes Ongoing, Marsh Indicates in Report.(Putnam Investments Inc., Marsh and McLennan Companies Inc., Securities and Exchange Commission and Department of Labor investigations)(Brief Article)
March 21, 2005... Regulators continue to hammer away at Putnam Investments, this time over potential conflicts of interest arising from its multiple role as investment advisor, retirement plan servicer and employer, parent company Marsh & McLennan indicated in...

Euro Fund Execs Lobby For Cross-Border Market.(executives, Forum of European Asset Managers )(Brief Article)
March 21, 2005... The chief executive officers of 14 major pan-European asset and fund management companies have teamed up in a new forum to push their case for a single EU cross-border investment market. "Despite years of effort, a single market for asset...

Timing Not as Rampant In Canada: OSC Chairman.(Ontario. Securities Commission's David Brown)
March 21, 2005... Close on the heels of U.S. regulators' investigations of mutual fund trading abuses, the Ontario Securities Commission began probing the Canadian mutual fund industry in November 2003. But unlike the spate of scandals that surfaced in the U.S.,...

Executive Moves.(Securities and Exchange Commission promotes Daniel M. Hawke, Teachers Insurance and Annuity Association College Retirement Equities Fund appointed Susan Kempler, Merrill Lynch Investment Managers' Mercury Advisors promoted Michael Horvath and appointments)
March 21, 2005... SEC Promotes Hawke as Philly Associate Director Daniel M. Hawke, who has worked for the Securities and Exchange Commission's enforcement division for five years, has been promoted to the division's associate district administrator position...

BoA Consolidates Custody, Accounting to State Street: But Shareholder Services to Remain In-House.(Bank of America)
March 21, 2005... Fallout from fund company mergers often means fund service providers will find themselves in one day and out the next, without them having caused a single service breach, tech snafu or operations meltdown. Consolidation of fund service...

Bulk of 401(k) Plans Fall Short on Fund Choice.
March 21, 2005... Too few choices in employee 401(k) plans have many investors reaping inferior returns because they're not properly diversified, according to a recent academic study published by three New York finance professors. In a research paper...

SEC Slaps Putnam With Another, $40 Million Fine.(Putnam Investments Inc.)(Brief Article)
March 28, 2005... Putnam Investments is in hot water with the Securities and Exchange Commission again, this time paying a $40 million fine because of revenue-sharing arrangements. The SEC said that the beleaguered fund company did not disclose to the fund...

SunGard Draws $10 Billion In Leveraged Buyout Talks.(SunGard Data Systems Inc., Silver Lake Partners)(Brief Article)
March 28, 2005... A private equity consortium led by Silver Lake Partners is in talks to buy SunGard Data Systems for as much as $10 billion, a move that would mark one of the biggest leveraged buyouts since the RJR Nabisco takeover, it was reported last week....

Hedge Funds May Employ Loophole to Elude SEC.(Brief Article)
March 28, 2005... As a federally mandated registration deadline nears, many hedge fund managers are considering longer lock-up periods to elude the regulation, a recent report indicates. Beginning next year, hedge funds with more than $30 million in assets...

Fidelity Eyes Bigger Clients: Spins Off $102 Billion Institutional Arm.(Fidelity Investments)
March 28, 2005... Fidelity Investments is investing $100 million to spin off its institutional investment arm in an effort to rein in new assets from pension funds, endowments and other large foundations. The Boston-based mutual fund giant, already known for...

SMAs Prepare for Baby Boomer Bonanza.(separately managed accounts)
March 28, 2005... Baby Boomers nearing retirement are in a fix: a fast-approaching retirement without enough retirement income. Boomers have, more often than not, embraced a lifestyle beyond their means. Trading up for luxury goods, they have come to...

Hennessy to Acquire Henlopen Fund as Its Chairman Seeks Exit, Spars with SEC.(Hennessy Advisors Inc., Michael Landis Hershey)
March 28, 2005... Hennessy Advisors of Novato, Calif., which now manages five no-load funds, has been shopping again. This time, the firm, with $1.4 billion in current assets, has signed an agreement to acquire the $340 million Henlopen Fund, managed by...

A Call for Entries - MME Hosts Third Annual Fund Operations Awards.
March 28, 2005... Money Management Executive and SourceMedia are accepting nominations for the third annual Fund Operations Awards. The awards recognize people in the back office who make things happen. A panel of industry judges will select notable...

State Street CEO Logue Rakes In $6 Million in 2004.(Ronald Logue)(Brief Article)
March 28, 2005... State Street Corp. reportedly paid Chief Executive Officer Ronald Logue a $2.8 million bonus for 2004, raising his total compensation to $6 million. In 2003, Logue was State Street's president and chief operating officer and earned $1.7...

Seven SMA Managers Win S&P Best in Class' Honor.(separately managed accounts, Standard & Poor's Corp.)(Brief Article)
March 28, 2005... Signaling their tremendous rise from obscurity in recent years, separately managed accounts were honored last Tuesday with their first annual awards by Standard & Poor's. The award ceremony serves as a significant milestone for the $576...

Canadian Fund Probe Not Over, as Questions Remain.
March 28, 2005... Canadian mutual funds may not be out of the woods just yet. Earlier this month, Ontario Securities Commission Chairman David Brown said in a speech that the agency had concluded its probe of the Canadian mutual fund industry (see MME...

Spitzer Subpoenas Clark Amid Insurance Probe.(Eliot Spitzer )(Brief Article)
March 28, 2005... Employee compensation and benefits consultant Clark has been subpoenaed by New York Attorney General Eliot Spitzer in connection with potential conflicts of interest from contingent commissions. Clark said it is fully cooperating with the...

This Year's Pioneer Award Winners: Widger, Sinsimer, Seuffert.(Money Management Institute, Charles Widger of Brinker Capital, Lawrence Sinsimer of Eaton Vance and James Seuffert of Bank of New York)
March 28, 2005... The Money Management Institute announced that its 2005 Pioneer Award recipients are Charles Widger of Brinker Capital, Lawrence Sinsimer of Eaton Vance and James Seuffert of Bank of New York. The awards will be handed out at the Institute's...

Experts: Industry Needs 10 Years to Reclaim its Reputation.
March 28, 2005... PALM DESERT, Calif. - Dov Seidman, chairman and CEO of the Los Angeles-based corporate governance and ethics consulting company LRN, calls the recent resignation of Boeing CEO Harry Stonecipher nothing short of remarkable. "No one can...