Investment News articles from January 2002

Investment News archives from January 2002

Nationwide faces kickback attack: Class action seeks to halt industrywide practice of 'revenue sharing'.
January 7, 2002... One of the nation's major 401(k) providers not only may be on the side of plan participants, but also may be dipping into their wallets -- illegally. A group of participants charges that Nationwide Financial Services Inc. has been...

As fog of war clears, a rebound looms: Slow but steady rise predicted for 2002. (2002 economic outlook).
January 7, 2002... To investors and financial advisers, the first two years of the new millennium could end up being a study in opposites. The difference would be a welcome relief. Early 2001 was marked by higher interest rates, rising energy prices, a...

Accountants reject global credentials. (At the Bell).
January 7, 2002... * Accountants have rejected overwhelmingly a plan to pursue global credentials. Almost 63% of 134,000 members of the American Institute of Certified Public Accountants who voted cast their ballots against forming the International...

Registry deletions opposed by SIA. (At the Bell).
January 7, 2002... * A plan to make it harder to delete disciplinary information about registered representatives from a public database was sharply opposed last week in official comments by the brokerage industry's major lobbying organization. The...

Foreign stock shed by U.S. investors. (At the Bell).
January 7, 2002... * Investors in the United States dumped shares of foreign stocks after the Sept. 11 terrorist attacks, according to a report by the Securities Industry Association. After two quarters of buying foreign stock, investors changed their strategy in...

Artisan set to close its mid-cap fund. (At the Bell).
January 7, 2002... * Artisan Partners in Milwaukee announced that it will close its Artisan Mid Cap Fund to most new investors when its assets reach about $2.2 billion, the company said Friday. As of Dec. 31, total assets in the fund were $2 billion. The...

Value managers get Morningstar kudos. (At the Bell).
January 7, 2002... * Value investing paid off last year, and Morningstar Inc. of Chicago announced Friday that four value managers were its Fund Manager of the Year Award winners for 2001. The winners in three categories -- domestic, international and...

Corrections.
January 7, 2002... * Charts on Page 6 of the Dec. 17 DataBook issue should not have combined the assets and performance of Deutsche Asset Management and Zurich Scudder Investments Inc. The merger has yet to be completed, and the assets of the two partners...

Stock market numbers offer little safety. (Monday Morning).
January 7, 2002... Some of the bears appear to have been slain, but is it safe yet to go back into the stock market? That depends on how brave you are and whether you believe the market has corrected the overvaluation that existed before the Internet bubble...

Miller rolls an 11, but fund falls 9%. (Short Interests).
January 7, 2002... Bill Miller is still on a roll. The manager of the Legg Mason Value Trust in Baltimore beat the Standard & Poor's 500 stock index again in 2001 -- extending his winning streak to 11 years. Mr. Miller is the only U.S. stock fund manager...

Underwater? Try waterworks. (Short Interests).
January 7, 2002... There's nothing like a little discouraging news to make wary investors even more apprehensive about the stock market. A new stock rating system developed by Weiss Ratings Inc. shows that just 17% of 5,549 U.S. common stocks adequately...

McCalling in their chips. (Short Interests).
January 7, 2002... Investors angry with their Merrill Lynch & Co. Inc. brokers for putting them into the Merrill Lynch Focus Twenty Fund and the Premier Growth Fund, both of which currently rank among the worst-performing mutual funds, have contacted a Florida...

Door open for advisers to help in 401(k)s: Department of Labor ruling clears the way.
January 7, 2002... Federal regulators have put a human face on advice for workers with self-directed retirement plans. The Department of Labor advisory opinion issued last month should also open the door for independent financial advisers to become more...

Money funds eye cut in fees to goose yields: Low rates posing problem for managers.
January 7, 2002... Investors plowing cash into money market mutual funds to escape the topsy-turvy stock market are learning that there's a world of difference between a haven and heaven. While such funds offer anxious investors relative peace of mind, they...

A master of value sees very little: Cheap is one thing the market isn't, says veteran of '29 crash.
January 7, 2002... For more than 70 years, Irving Kahn has studied companies, searching for stocks that he believed were undervalued. These days, he doesn't find many. At 96, Mr. Kahn may be one of the few individuals who can put these uncertain times...

Silver lining in unemployment cloud?. (Reverse Spin).
January 7, 2002... It's one of those good-news, bad-news things. The good news is that the pace of U.S. job losses slowed in December, compared with the initial months after the Sept. 11 terrorist attacks. The bad news is that the job market continued to shrink...

Citigroup triumphs. (Reverse Spin).
January 7, 2002... * Psst! Wanna buy the Brooklyn Bridge? Talk to the folks at Citigroup Inc. Apparently, they can sell anything. With $486.9 billion of sales, the NewYork financial services company became Wall Street's largest underwriter of stocks and bonds in...

Christmas blues. (Reverse Spin).
January 7, 2002... * Looks as if it was a blue Christmas for many retailers. Despite a small pickup in sales the week before Christmas, overall sales during the critical holiday shopping season were pretty anemic, two reports suggested Wednesday. Sales at...

Talking about Tyco. (Reverse Spin).
January 7, 2002... * The folks at Tyco International Ltd. may in the immortal words of Ricky Ricardo, have some "'splaining to do." Tyco shares tumbled last week after a report hit the street that the giant conglomerate maybe the subject of an investigation...

Europeans crooning to U.S. life insurers. The lyric is, "We wanna hold your hand".
January 7, 2002... By any measure, the table is set for consolidation in the U.S. life insurance industry. But not since the Beatles first visited has there been this level of anticipation and speculation over the European influence. "There's no doubt that...

Morningstar set to wrap for advisers: But will they buy its portfolios for clients?
January 7, 2002... In the supermarket game that is the mutual fund business, Morningstar's managed-portfolio program is finding no difficulties getting shelf space in the wrap-program aisle. But the questions remains: Will advisers pick it for their clients?...

Giving advisers the time to grow. Litman/Gregory site offers off-the-shelf asset management.
January 7, 2002... Small financial planning companies are caught between the clock and a hard place. Based on the preliminary results of a new survey of financial advisers, time constraints are a top concern, and small companies in particular are looking for...

Brokers, advisers a weak link on annuity sales: Poor knowledge may be factor in downturn.
January 7, 2002... The variable-annuity market is stagnating, and brokers and advisers bear some of the blame. Overall, according to a Cerulli Associates Inc. report on the annuity market, they're not up to date on newer, more flexible products that make...

House bill would cut annuity tax: Proceeds would count as long-term gains.
January 7, 2002... If the life insurance industry gets its way, annuities could give other retirement products a better run for investors' money. A bill introduced on Capitol Hill late last year would let withdrawals from annuities be taxed as long-term...

A gadfly with clout joins options debate. (Taking Sides).
January 7, 2002... Bill Miller, CEO of Legg Mason Funds Management Inc., a division of Legg Mason Inc. of Baltimore, is nationally known for his investment savvy as well as his soft-spoken personality. But all that is about to change. Meet Bill Miller,...

Questioning comments, after issuing a 'no comment'. (At Issue).
January 7, 2002... I am writing to express my concern with the article in your Dec. 3 issue headlined "First Union's brokerage feeling growth pains." The piece by Bruce Kelly presents in a single article unrelated and questionable (not to say incorrect)...

Industry braces for body blows over Enron: Energy company fiasco to exact toll on the Hill. (2002 Economic Outlook).
January 7, 2002... After a year of significant legislative success, the financial industry may have to play defense this year. The spectacular failure of Enron Corp. in Houston could ricochet off the accounting industry and hit the securities industry. ...

Regulation: Advisers could face piles of new red tape this year; Feds, CEP Board eye several new rules. (2002 Economic Outlook).
January 7, 2002... The Securities and Exchange Commission's proposal to exempt brokers from registration as investment advisers as long as they have no discretion over clients' funds is topping the list of regulatory issues for financial planners this year. ...

Year-end equity fund wrap-up: 2001 was for the birds -- and the bogeys. (The Markets).
January 7, 2002... 2001 was for the birds -- and the bogeys Year-end equity fund wrap-up LARGE-CAPS TOP 20 1-year 3-year 5-year Oppenheimer Value A 2.98 -1.14 ...

NMT Medical benefits from a financial bypass. (Street Wise Commentary).
January 7, 2002... With its stock gaining 769% over the past 12 months, it might be easy to argue that NMT Medical Inc. (NMTI) has had its 15 minutes of fame and that now is the time to start taking profits. But the story is still unfolding. The stock, now...

Investment watch.
January 7, 2002... The stock price for the San Francisco-based online discount broker took off this week. After a disappointing 2001, the market is looking for the online firms such as Schwab to come back. Shares opened Monday at $15.35 and closed Friday at...

Top 25 independent broker-dealers ranked by producing reps.
January 7, 2002... Top 25 independent broker-dealers ranked by producing reps This chart corrects the listing of top independent broker-dealers that appeared in InvestmentNews' Dec. 17 DataBook issue. Broker-dealer No. of...

"Having a convertible strategy helps you in a market that's very volatile". (One on One).
January 7, 2002... For better or worse, Calamos Asset Management Inc. in Naperville, Ill., will probably always be linked to the specialized world of convertible-bond mutual funds. But the family-run firm -- founded in 1977 by its president, John Calamos --...

Wilmington Trust acquires Balentine. (At the Bell).
January 14, 2002... Wilmington (Del.) Trust Corp. has completed its acquisition of Balentine & Co., an Atlanta investment counseling business. Balentine, which manages $1 billion for rich clients and consults on $2 billion for institutions, will continue to...

NASDR is bringing annuities actions. (At the Bell).
January 14, 2002... Several enforcement cases stemming from misrepresentations about the tax advantages of variable annuities in tax-deferred accounts soon will be completed, according to Barry Goldsmith, executive vice president of enforcement for NASD Regulation...

Rowe Price to add adviser-only fund. (At the Bell).
January 14, 2002... T. Rowe Price Associates Inc. in Baltimore plans to add adviser-only shares to its Growth Stock fund within the next several weeks. The $4.3 billion fund, managed by Robert Smith, will be added to a roster of 10 funds that already offer...

Fund? What fund?: Record number of portfolios were merged in 2001.
January 14, 2002... The urge to merge funds has reached a fever pitch. Mutual fund mergers shattered records last year as fund companies scrambled to squeeze costs out of swollen fund rosters and deep-six miserable track records. Last year, there were 372...

A changing of guard at Schwab: Graves to leave post at adviser operation.
January 14, 2002... Gerald Graves, the man at Schwab Institutional whom many advisers consider their staunchest champion, is being moved out, but there may be a silver lining, analysts say. Mr. Graves, 40, Schwab Institutional's chief operating officer since...

Different court, new game: Jordan divorce highlights need for specialized financial planning.
January 14, 2002... Michael Jordan once described his wife, a former bank loan officer, as the "chief of finances," ruling over a household worth an estimated $400 million. But if Juanita Jordan hopes to slam-dunk the basketball wizard in divorce court, she...

Merrill set to push in-house funds. (At the Bell).
January 14, 2002... Look for Merrill Lynch & Co. Inc. brokers to make a push to sell more of the company's proprietary funds over the next couple of years. Bob Doll, chief investment officer with Merrill Lynch Investment Managers, the New York broker's money...

Calif. broker sold to Royal Alliance. (At the Bell).
January 14, 2002... Royal Alliance Associates Inc. of New York was set last week to buy PIM Financial Services Inc., a broker-dealer based in San Marcos, Calif. PIM Financial has about 100 brokers. Terms of the deal, which is slated to close in February,...

Scudder exec joins FleetBoston unit. (At the Bell).
January 14, 2002... Wanger Asset Management LP of Chicago, recently acquired by FleetBoston Financial Corp., has hired a portfolio manager, Andreas Waldburg-Wolfegg, from New York's Zurich Scudder Investments Inc. far its international investing team.

Morgan Stanley losing an exec. (At the Bell).
January 14, 2002... John A. Levin & Co., the value-oriented money management unit of BKF Capital Corp. in New York, has hired Philip Friedman away from Morgan Stanley of New York, where he was a managing director. Mr. Friedman, now head of U.S. active equity...

Style or skill? Look hard at performance. (Insights & Analysis).
January 14, 2002... Anytime now, we will begin to see press releases from mutual funds and money managers boasting how they beat the market last year. For example, according to Lipper Inc., 99% of small-cap-value mutual funds and 86% of large-cap-value funds...

A tidier reason for Martha's stock sale. (Tips, Trends & Observations).
January 14, 2002... Rumors flying around about domestic diva Martha Stewart's financial troubles are just that, according to the firm that paid $45 million for 3 million shares of her stock in her eponymous corporation, Martha Stewart Living Omnimedia Inc. While...

AmEx bigwig: Let us into the game. (Tips, Trends & Observations).
January 14, 2002... The time has come for retirement plan service providers to get off the bench and into the game of providing advice and guidance to individual plan participants. That, says Ward Armstrong, president of American Express Retirement Services in...

Oops! (Tips, Trends & Observations).
January 14, 2002... Maryland's new 529 college savings plan started out with a bang, but it also could bust state coffers. Since the plan's launch in mid-December, Marylanders have invested $100 million in 27,000 accounts, which are managed by T. Rowe Price...

Will staid CPAs become leading (h)edge?: Web-based adviser systems courting accountants with alternatives.
January 14, 2002... Certified public accountants are known as conservative bean counters, so are they the right people to recommend hedge funds and separate accounts? It's a question many investors may soon find themselves asking. That's because as more...

Adviser blazes trail to the next frontier: Capturing liabilities side of the balance sheet.
January 14, 2002... David Richards, a certified financial planner, wants to offer colleagues a way to keep banks from poaching client assets. The weapon: offering mortgages to capture the liabilities side of a client's balance sheet. Within the next...

Odds sweeten on gaming bets: As states eye casinos, industry stocks rise.
January 14, 2002... The particularly brutal toll the economic downturn is taking on state budgets across the country has created a paradise for gambling-related stocks. For some states, legalized gambling could be shifting from an option to a necessity,...

Another gray cloud from Greenspan. (The Week in Review).
January 14, 2002... So much for ending the workweek on a positive note. Thanks to a less-than-uplifting speech by Federal Reserve Board Chairman Alan Greenspan, stocks took a tumble on Friday. The Dow Jones Industrial Average fell 80.33 points, or 0.8%, to...

A 'sorry' Ford to forgo his salary. (The Week in Review).
January 14, 2002... * Ford Motor Co., the world's second-largest automaker, said Friday that it will shed 35,000 jobs, close five plants and eliminate four models. "We realize that some of the things that must be done will be painful"' said William Clay Ford Jr.,...

Merrill is bullish on downsizing. (The Week in Review).
January 14, 2002... Don't expect much humility out of this group. Merrill Lynch and Co. Inc. said Wednesday it was taking a $2.2 billion charge in the fourth quarter to fund about 9,000 pink slips as it scrambles to slash costs. On the barely bright side, New...

She's baaaaack! (The Week in Review).
January 14, 2002... Maybe, just maybe, Lucent Technologies Inc. is getting into the boomerang business. On Monday, the Murray Hill, N.J., telecommunications equipment maker named Eastman Kodak Co.'s president, Patricia Russo, chief executive, bringing back a...

Not in nick of time. (The Week in Review).
January 14, 2002... * Yes, that sigh of relief you heard Friday came from Morgan Stanley. Apparently a panel dismissed charges against the company's Dean Witter Reynolds unit because National Association of Securities Dealers Regulation Inc., the regulatory branch...

Fund group asks holders to cut it some slack: Enterprise Capital wants fewer restrictions on investment policy.
January 14, 2002... Add Enterprise Capital Management Inc. to the list of fund companies with control issues. The trustees that oversee the Atlanta company's funds are asking shareholders to approve proposals that would allow them to alter certain investment...

Activists renew push for proxy disclosures: Want funds to reveal how and why of votes.
January 14, 2002... A prominent figure in socially conscious investing has fired the first salvo at the country's new chief securities cop in a crusade that is getting support from corporate-governance watchers. In a recent letter to Harvey Pitt, chairman of...

Insurers hail group's support for Social Security annuities: Presidential commission suggests some use of investment.
January 14, 2002... Life insurers are gaining ground in their push to use annuities in Social Security accounts should privatization ever become the law of the land. A draft report issued in December by the President's Commission to Strengthen Social Security...

As hedge funds outperform, brokers gear up to sell them: Firms use in-house, outside managers to craft offerings.
January 14, 2002... Preliminary figures suggest that many hedge funds and funds of hedge funds beat the market for the second straight year in 2001, as brokerage houses continued to jump into the business head first. While stocks continuing to struggle,...

Enron raises heat for accounting reform: Criminal probe coincides with new look at audit standards.
January 14, 2002... Call it a case of fire then smoke. As the Enron conflagration threatened to envelop the Bush administration last week, the widening scandal turned up the temperature on glaring shortcomings in corporate financial reporting. While...

SEI referral plan draws assets and competition: Advisers paid for referrals, but does it compromise true mission?
January 14, 2002... A little-known referral program has netted SEI Investments Co. more than $3 billion in assets in just three years. The company set up the program in 1999 so its 3,400 independent advisers could land a few big pension fish while trolling for...

Merrill's new Mitts shag big fees for downside cover: Security assures repayment of principal, limits return.
January 14, 2002... Merrill Lynch & Co. Inc. is planning another issue of an unusual security that's guaranteed not to lose money while offering at least some potential for stock market-like returns - but customers will pay a steep price for it. The giant...

Finding Spanish gold earns ex-CEO a medal: Spain's president cites Williams of Alliance.
January 14, 2002... Emerging-markets investments can be rewarding. Dave Williams received the Order of Civil Merit from Spanish President and Prime Minister Jose Maria Aznar Lopez late last year. The award, which is "a great big medal on a ribbon," according...

IMCA ethics standards: A good start that needs to qo further. (Editorial).
January 14, 2002... The excesses of the tech stock boom and bust renewed the off-again, on-again debate about ethics in the financial services industry. Last year, you may recall, disgruntled investors lined up to file complaints at a record pace, blaming...

Exam's required now, so no free pass for ChFCs. (Correspondence).
January 14, 2002... I am responding to the letter by Jennifer Curley [At Issue, Dec. 10]. Ms. Curley states, "It makes sense to allow people with the ChFC designation access to the CFP letters." If by "access" she means the right to take the comprehensive CFP...

Fed policy more harmful than 9/11 attack: Politicians, pundits and the Fed have been focusing on the wrong variables and confuse rate cuts with a policy of monetary easing. (Opinion).
January 14, 2002... The Fed's discretionary monetary policy has whipsawed the U.S. economy from inflation to deflation in less than a year. The 12-month change in producer prices slumped to -1.1% in November 2001 from 4.8% in January 2001, doing far more economic...

To harvest fund tax losses, make use of free exchanges: A swap strategy avoids fees, which can cut deeply into returns. (Opinion).
January 14, 2002... At the end of any year during which many mutual funds have suffered significant losses, personal finance columns advise the investing public and their advisers to examine the tax benefits of harvesting their losses. They do that by selling...

London hedge fund group crossing the pond gingerly. (Fast Track).
January 14, 2002... John Kelly has traveled the world helping Man Group PLC to expand its hedge fund business. But his recent relocation to Chicago from Switzerland could be his biggest adventure yet. With $9.5 billion under management in 180 hedge funds,...

Moving Up: Hirings & Promotions.
January 14, 2002... * Allianz Life Insurance Company of North America in Minneapolis has appointed CEO Robert W. MacDonald, 58, chairman, succeeding Lowell C. Anderson, who retired at yearend. Senior vice president and chief financial officer Mark A. Zesbaugh,...

Bond fund expenses: Checking out the prices on the fixed-income shelf.
January 14, 2002... Bond fund expenses Checking out the prices on the fixed-income shelf HIGH-YIELD MUNI EXPENSE 1-YEAR ASSETS RATIO RETURN ($M) LOWEST COST ...

SpectRx closes the loop on diabetes treatment. (Commentary).
January 14, 2002... SpectRx Inc. (SPRX) is on a mission to develop a closed-loop system in the area of diabetes treatment - that means providing the system for individuals to both monitor their glucose levels and deliver insulin as needed. Earlier this month,...

At a glance: Knight Trading Group Inc. (Investment Watch).
January 14, 2002... 2000 revenues: $1.3 billion 2000 earnings: $259.9 million 1999: $896.6 million 1999: $211.3 million 52-week high: $24.50 52-week low: $7.25 P/e: 26.32 Price/book: 1.89 Market cap: $1.56 billion The...

"Markets are generally higher in the [next] year if you look at all the major crises". (One on One).
January 14, 2002... Jeffrey Hirsch never intended to become a stock market statistician. In fact, despite having looked at stock charts since the tender age of 8, he went to college to study philosophy. But the family business, started by his father, Yale...

Federal audit role backed by LaFalce. (At the Bell).
January 21, 2002... * The top Democrat on the House Financial Services Committee says that a securities regulator's proposal for improving the integrity of the auditing profession may not go far enough. Harvey Pitt, chairman of the SEC, said Thursday that he...

AMG portfolios offer multiple managers. (At the Bell).
January 21, 2002... * Affiliated Managers Group Inc. in Boston is leveraging relationships with its institutional money manager affiliates to sell packaged stock portfolios to retail investors. The Diversified Managed Allocation portfolios, which require a...

$4.5 million penalty for a Conn. broker. (At the Bell).
January 21, 2002... * NASD Regulation Inc has ordered Tower Square Securities Inc. of Hartford, Conn., to pay $4.5 million in fines and restitution. The complaint against Tower Square involved a former rep of the firm, Kevin B. Dermody, and his business...

Paul O'Neill's sweet deal: IRS backs off closing loophole, averting tax liability for execs and treasury chief.
January 21, 2002... The Internal Revenue Service has backed off of a plan to close a loophole in the tax code through which some of the nation's richest executives -- including Treasury Secretary Paul O'Neill -- stand to reap huge windfalls virtually tax free. ...

Leveraging a brand: For a price, advisers can use Schwab name.
January 21, 2002... Charles Schwab & Co. Inc. has finally found a way to flex its giant retail muscles on behalf of its advisers. Schwab Institutional, the San Francisco discount brokerage's adviser arm, is retooling its AdvisorSource referral program in a bid...

Schwab wins round in fight with Advent: California judge enjoins software maker.
January 21, 2002... In the heavyweight legal battle for the hearts and modems of Schwab's advisers, the San Francisco broker has won a key early round against its software rival. California Superior Court Judge James J. McBride in San Francisco approved a...

Lehman acquires M&A advisory. (At the Bell).
January 21, 2002... * Lehman Brothers Holding Inc. of New York said Friday it had acquired Cohane Rafferty Securities LLC, a White Plains, N.Y, investment bank specializing in mergers-and-acquisitions advice to the mortgage banking and asset brokerage businesses....

Nasdaq to offer new data package. (At the Bell).
January 21, 2002... * The Nasdaq Stock Market will offer a new online package for broker-dealers and institutional investors called Nasdaq PostData. The product, approved last week by the SEC, will launch in March. Nasdaq PostData will offer daily share volume...

Asset management slips at J.P. Morgan. (At the Bell).
January 21, 2002... * J.P. Morgan Chase & Co., one of the world's 10 biggest money managers, said Friday that profit at its investment management and private banking business fell 2g.4% in the fourth quarter as assets in higher-fee-generating equity portfolios...

Profit off a little for Legg Mason. (At the Bell).
January 21, 2002... * Legg Mason Inc. of Baltimore said earnings dropped slightly in its fiscal third quarter which ended Dec. 31 as increases in compensation offset revenue gains. Legg Mason ended December with $170.1 billion in assets under management, 24.3...

Simple lessons from a complicated crash. (Insights & Analysis).
January 21, 2002... The Enron disaster is sure to be examined in the tiniest detail, first by a posse of congressional committees, then by the Department of Justice and the Securities and Exchange Commission, searching for wrongdoing and villains. Ultimately,...