Investment News articles from July 2004

Investment News archives from July 2004

At the Bell; SEC to expand INVESCO lawsuit.(Late News)
July 12, 2004... The Securities and Exchange Commission intends to expand the number of individuals facing civil charges at Denver's INVESCO Funds Group Inc., according to reports Friday. The SEC, which in December filed civil fraud charges against INVESCO...

Bail-and-switch tactics get NASD's attention; It probes wholesale replacement of annuities by brokers who have just changed firms.(News)
July 12, 2004... Byline: Sara Hansard WASHINGTON - Faced with growing evidence that variable annuity replacement activity is picking up, NASD is investigating "mini replacement campaigns'' by individual brokers or groups of brokers who change firms and...

Funds with lower fees rule the roost.(Short Interests)
July 12, 2004... Byline: Frederick P. Gabriel Jr. BOSTON - Stock mutual funds with lower fees once again outperformed their more expensive brethren in nearly all fund categories, according to a recent study by Standard & Poor's. Funds that charge a...

People.
July 12, 2004... The Bond Market Association in New York has hired Manfred Schepers, 43, as an executive vice president and appointed him senior managing director and head of The Bond Market Association International in London. He will play a role in building...

With Christopher C. Davis of Davis Advisors.(One on One)
July 12, 2004... Byline: Rick Miller While some in the mutual fund industry may succumb to temptation when it comes to managing people's money, Christopher C. Davis says he is guided by the biblical principals of stewardship. A former theology student...

Fidelity Advisor adds emerging-markets fund.(Product Watch)
July 12, 2004... Fidelity Investments in Boston has introduced the Fidelity Advisor Emerging Markets Fund, which may be suitable for investors seeking increased portfolio diversification and exposure to potential growth opportunities of emerging markets. ...

When selling retirement products, be sure to include protective gear.(Other Views)
July 12, 2004... Byline: Douglas Mangini Remember the trip to the local bicycle shop for your first 10-speed bike? There were boys' and girls' bikes of several shiny colors, and a few different designs. It had everything a 12-year-old graduating from...

VUL ignorance a deterrent.(Short Interests)
July 12, 2004... Byline: Rick Miller CHICAGO - Independent advisers who sell insurance think variable universal life could be appropriate for their clients, but a lack of knowledge about the product may cause them to avoid such policies. That finding...

It is time to be proactive on regulation.(Editorial)
July 12, 2004... The Securities and Exchange Commission meets this week to consider new rules that would require hedge fund advisers to register with it. The plan has apparently sparked opposition inside the commission and from Federal Reserve Board Chairman...

Markets depend on Fed, not election, study finds; Monetary policy found to be key driving force.(News)
July 12, 2004... Byline: Rick Miller CHICAGO - The performance of the stock and bond markets over the next four years will have more to do with the Federal Reserve than the political party that occupies the White House, according to a soon-to-be-released...

Barclays' Morningstar ETFs receiving mixed reviews; Some like their precision; critics prefer Russell indexes.(News)
July 12, 2004... Byline: Brooke Southall SAN FRANCISCO - Barclays Global Investors is selling nine new exchange traded funds based on Morningstar indexes, but some financial advisers question whether these products would contribute anything new to their...

Rewarding income tax whistle-blowers.(Tax Watch)
July 12, 2004... Byline: Mark Battersby A recently introduced proposal that would create an Internal Revenue Service office for whistle-blowers is designed to give tax agents an inside advantage when fighting complicated, often invisible tax shelters used...

Good grief! Kenneth lays bare Enron.(Reverse Spin)
July 12, 2004... Byline: Frederick P. Gabriel Jr. Sounds like Kenneth Lay needs a little grief therapy. On Thursday, the former chairman and chief executive of Enron Corp. in Houston pleaded innocent to federal charges that he was involved in a company...

Micro-cap magic maker takes show on the road.(Street Wise)
July 12, 2004... Byline: Jeff Benjamin It would be difficult to try to dispute the methodology of veteran stock picker O. Thomas Barry. The Bjurman Barry Micro-Cap Growth Fund (BMCFX), which he has managed since March 1997, jumped 67% last year, which...

Schwab's hedge bet pays off: Fund-of-funds mart catches on; Assets, advisers flock to Alternative Investment Source platform.(News)
July 12, 2004... Byline: Brooke Southall SAN FRANCISCO - Charles Schwab Corp. is starting to see progress in its largely unpublicized effort to replicate with hedge funds its success in hawking mutual funds though its OneSource no-transaction-fee...

Recommended reading for all seasons.(Monday Morning)
July 12, 2004... Byline: Mike Clowes For the first 1,000 years after the birth of Christ, the real per capita gross domestic product throughout the world was only a little more than $400 a year. Over the next 500 years, it increased only slightly to about...

Encouraging a uniform approach to 529 plans.(Editorial)
July 12, 2004... The popular Section 529 college savings plans have come under some scrutiny due to the marketing tactics used to sell them, and a lack of clarity in disclosure statements. Taking steps in the right direction, states that sponsor 529 plans...

States float uniform-disclosure rules for 529s.(Short Interests)
July 12, 2004... Byline: Sara Hansard WASHINGTON - State treasurers are trying to deflect growing criticism of Section 529 college savings plans by proposing voluntary uniform disclosures by which all states would abide. A delegation of state...

ICI endorses FASB options-expensing plan.(Short Interests)
July 12, 2004... Byline: Sara Hansard WASHINGTON - The Investment Company Institute has endorsed a controversial proposal by the Financial Accounting Standards Board to require that stock options be expensed on company financial statements. "Mutual...

Calendar.(Calendar/Datebook)
July 12, 2004... July 14-16 - Forum 2004: The Forum for Hedge Funds, Managed Funds Association. Waldorf-Astoria, New York. (202)367-1173 or mfainfo.org. 17-18 - Tax Planning for Domestic and Foreign Partnerships, LLCs, Joint Ventures and Other...

A solution in search of a problem? Advisers shrug at Amex's plan to develop actively managed ETFs.(News)
July 12, 2004... Byline: David Hoffman NEW YORK - The American Stock Exchange said it has developed a way to provide actively managed exchange traded funds, but such funds may not become a reality anytime soon. Market experts familiar with the solution...

A top indie to do E&O on its own; Commonwealth says it can provide better-priced coverage.(News)
July 12, 2004... Byline: Bruce Kelly NEW YORK - In a highly unusual move, a leading independent broker-dealer has severed ties with the insurance carrier for its brokers, and set up its own independent insurance company. Commonwealth Financial Network...

Fund closings reach fever pitch; Biggest increase in 40 years reflects huge inflows, regulation, cost concerns.(News)
July 12, 2004... Byline: Frederick P. Gabriel Jr. BOSTON - With money gushing in and regulators on the warpath, mutual funds are closing their doors to new investors like never before. In the past six months, the largest share classes of at least 31...

AEGON latest to exit individual-LTC market; No. 5 carrier to join exodus that began last year.(News)
July 12, 2004... Byline: Rick Miller CHICAGO - In a move sure to shake further the confidence of sellers and consumers of long-term-care insurance, another major carrier has decided to call it quits. AEGON USA Inc. in Baltimore, the No. 5 company in...

Controversial NYSE arbitrator to stay on case.(News)
July 12, 2004... Byline: Bruce Kelly NEW YORK - An unresolved New York Stock Exchange arbitration case will continue with its panel of three arbitrators intact. Following a ruling late last month by New York Civil Court Judge Kibbie F. Payne, the $23...

Banks make inroads into separates business; Access, experience help them narrow wirehouses' wide margin.(News)
July 12, 2004... Byline: Jeff Benjamin DETROIT - The banking industry may have finally found its "in'' to the investment management business. While banks have been trying for years to break into asset management by selling mutual funds, many are now...

Bonus offer from online trade firm.(Short Interests)
July 19, 2004... Byline: Jeff Benjamin DETROIT - Even the worst stock pickers can expect to earn at least 2% when trading shares over an Internet-based platform known as ex24.com. The trading system, launched in April, has started a "4% for 2004''...

Credit where it is due.(Short Interests)
July 19, 2004... Byline: Meredith Deliso NEW YORK - Bad credit may not be a consumer's fault, according to a survey conducted in the spring by U.S. Public Interest Research Group in Washington. The survey found that one in four credit reports contained...

Coming soon: A peek into fund proxy voting; Industry says proponents' publicity plans point up its fears about rule.(News)
July 19, 2004... Byline: Frederick P. Gabriel Jr. BOSTON - The mutual fund industry's day of reckoning is near. On Aug. 31, fund companies for the first time will be forced to go public with details about how their funds cast proxy votes on...

Estate planners 'dig' IRS ruling on trusts; It clarifies tax consequences.(News)
July 19, 2004... Byline: Rick Miller CHICAGO - Sound out the acronym for an intentionally defective grantor trust, IDGT, and "I dig it'' sums up how financial planners are reacting to an Internal Revenue Service ruling this month on the estate-planning...

Compliance concerns take center stage amid fund scandal; Clearing firms are even helping broker-dealers to keep up with regulatory changes.(Clearing Firms)
July 19, 2004... Byline: Bruce Kelly NEW YORK - Clearing firms, echoing concerns heard throughout the financial services industry, are focusing more attention and effort on compliance. The stakes are high, particularly as clearing firms' correspondent...

American Century swings away.(Short Interests)
July 19, 2004... Byline: Brooke Southall SAN FRANCISCO - Before advisers ask clients about their investing philosophies, they might ask about their golf handicaps. The answers may tip them off as to what kinds of asset allocation their clients prefer. ...

Money managers see sunny days for stocks.(Short Interests)
July 19, 2004... Byline: Frederick P. Gabriel Jr. BOSTON - For a group generally not known for its "don't worry, be happy'' attitude, money managers are optimistic about the direction of the U.S. stock market. Despite rising interest rates, high oil...

Investors turn to bank-loan funds; Rising interest rates make them more popular; advisers warn about pitfalls.(News)
July 19, 2004... Byline: David Hoffman NEW YORK - Fear of rising interest rates is driving investors to invest in bank-loan funds. At the end of May, $17.7 billion of net assets were sitting in 41 such mutual fund shares, compared with $15.95 billion...

Cat doesn't have adviser's tongue.(Short Interests)
July 19, 2004... Byline: Brooke Southall SAN FRANCISCO - Financial adviser Christopher Inglis is doing quite well nine months after his cat, Ted, was found after disappearing for more than a decade. Mr. Inglis was identified as the cat's owner via a...

Day trader isn't a securities trader, Tax Court finds.(Tax Watch)
July 19, 2004... Byline: Mark E. Battersby The U.S. Tax Court recently ruled that a day trader didn't qualify as a securities trader eligible to make the mark-to-market election. The controversial ruling challenged positions taken by numerous others in...

Wall Street economists predict strong GDP growth through 2005; Business investment is driving growth, bond group's survey finds.(News)
July 19, 2004... Byline: Sara Hansard WASHINGTON - Wall Street investment bank economists have predicted that U.S. gross domestic product will grow 4.7% in 2004 and will continue to expand at a slower 3.9% annual rate in 2005, up from 3.1% in 2003. ...

Proposed restrictions for self-employed could affect advisers; The FPA opposes California plan.(News)
July 19, 2004... Byline: Sara Hansard WASHINGTON - California may start requiring businesses to report payments to independent contractors and withhold 2% of the fees paid to them. Such a move, designed to stem cheating on taxes, would likely be applied to...

Plaintiffs' attorneys zero in on broker variable annuity sales; Some, emboldened by rise in arbitration cases, see vulnerability.(News)
July 19, 2004... Byline: Bruce Kelly NEW YORK - Securities plaintiffs' attorneys, often a bane to broker-dealers, are sizing up what they regard to be a soft underbelly for some firms: how some registered representatives sell variable annuities. Over...

Strong may be down, but don't count it out; Boosters cite standout offerings, Wells' solid reputation.(News)
July 19, 2004... Byline: David Hoffman NEW YORK - Now that mutual fund company Strong Financial Corp. is about to get a new owner, its menu of funds may be worth a second look, some fund experts said. For starters, Wells Fargo & Co., the San...

NASD must prevent unsuitable VA swaps.(Editorials)
July 19, 2004... NASD must take harsh action against brokers who plunder their clients by making inappropriate variable annuity swaps or who sell VAs to people for whom they are unsuitable. It must send strong signals that such actions will not be...

Washington to nip LILAC in the bud? An uncharitable eye for investor-owned insurance policies.(News)
July 19, 2004... Byline: Sara Hansard WASHINGTON - Congress and the Internal Revenue Service may be poised to crack down on the lucrative and controversial policies known as investor-owned life insurance, according to experts on charitable giving. ...

An annual credit check can prevent grief.(Monday Morning)
July 19, 2004... Byline: Jim Pavia By the time you finish reading this issue, someone in the United States will be turned down for a job or refused a mortgage, and they will have no idea it is due to a mistake on their credit report. Consumer credit...

At the Bell; Two INVESCO funds gain new managers.(Late News)
July 19, 2004... The $3.52 billion INVESCO Dynamics Fund and $21 million INVESCO Mid-Cap Growth Fund received new managers Friday, according to a statement from AIM Management Group Inc. in Houston. AIM, a subsidiary of AMVESCAP PLC in London, distributes...

SEC proposal to register hedge funds wins praise; Advisers say due diligence has been difficult.(News)
July 19, 2004... Byline: Sara Hansard WASHINGTON - Some financial advisers welcomed a proposed regulation approved last week that would require hedge fund advisers to register with the Securities and Exchange Commission and adopt internal compliance...

Privacy issue hits snag.(Short Interests)
July 19, 2004... Byline: Sara Hansard WASHINGTON - A June 30 U.S. District Court ruling favoring a new California privacy law on the eve of the day it took effect has further complicated privacy regulations for the financial services industry. The...

With Brian Shea of Pershing LLC.(One on One)
July 19, 2004... Byline: Bruce Kelly Brian Shea, the chief operating officer at Pershing LLC, knows the ins and outs of the clearing business. He's been with Pershing since 1983. Most recently, Mr. Shea has spent a good amount of his time focused on...

Chartered alternative investment analyst mark gains fans; Advisers respond to client demand for the non-traditional.(News)
July 19, 2004... Byline: Liz Skinner WASHINGTON - Wealthy clients are looking increasingly for investments that fall well outside the territory of stocks and bonds. Some want hedge funds or managed futures, while others are looking for real estate ventures...

Insurance broker boon?(Short Interests)
July 19, 2004... Byline: Sara Hansard WASHINGTON - Thanks to an aging baby boomer population, insurance brokers will have a growing market for group disability benefits, according to the Council of Insurance Agents and Brokers, which represents...

Stewart ready to decorate the big house.(Reverse Spin)
July 19, 2004... Byline: Frederick P. Gabriel Jr. For anyone who thinks they have seen the last of pumpkins carved in the shape of St. Peter's Basilica, or gold-plated cake toppers, think again. Although home-decorating guru Martha Stewart was...

Fund manager bullish on industrial companies.(Street Wise)
July 19, 2004... Byline: Jeff Benjamin The global economic recovery plays right into Keith Yoder's hands as manager of the $36 million Saratoga Mid Capitalization Fund (SPMAX). He manages money for Caterpillar Investment Management Ltd. in Peoria,...

Warn clients that they may have later tee time.(Editorials)
July 19, 2004... The good news about Social Security this year is that over the past 12 months, there was little change in the system's financial status. The trust funds are projected to be exhausted in 2042, the same prediction as last year, and the point at...

M Financial gains new resource.(Short Interests)
July 19, 2004... Byline: Gary S. Mogel NEW YORK - Member firms of the Portland, Ore.-based M Financial Group network will have an additional resource to assist them in identifying and meeting the planning needs of the disabled and their families. ...

Inflation-linked corporate bonds pick up steam; Among the drawbacks: Credit-quality concerns.(News)
July 19, 2004... Byline: Ilana Polyak NEW YORK -So far, advisers' inflation-fighting arsenal has been limited to Treasury inflation-protected securities. Certainly, the bonds have been a potent way to buy inflation protection inside the stable coupon...

VA product design at crossroads.(Short Interests)
July 19, 2004... Byline: Rick Miller CHICAGO - The variable annuity industry is approaching a crossroads at which asset allocation strategies will no longer take a back seat to subaccount options in future product design, according to a recent study by...

Call to donate part of profits inspires some; One competitor questions Bridgeway CEO's challenge.(News)
July 19, 2004... Byline: Rick Miller CHICAGO - John Montgomery has a challenging proposition for his fellow mutual fund executives: Give away a share of the profits. His company, Bridgeway Capital Management Inc. in Houston, does just that, donating...

Short-term-trade fee may have long reach; New Fidelity policy could extend to clearing clients.(News)
July 19, 2004... Byline: Brooke Southall SAN FRANCISCO - Fidelity Investments is alerting financial advisers who have assets under custody there to brace themselves for a new fee on sales of short-term mutual fund holdings. It will charge clients of...

Schwab offers Soundview research to advisers; Advisers say that, despite its limitations, it tops the brokerage firm's previous offerings.(News)
July 19, 2004... Byline: Brooke Southall SAN FRANCISCO - Charles Schwab & Co. Inc. is giving its financial advisers an early Christmas present, but some of them won't bother to unwrap it. On July 7, the San Francisco-based broker started offering free,...

Advisers cheery about the economy.(Short Interests)
July 19, 2004... Byline: David Hoffman NEW YORK - Financial advisers are feeling pretty good about the economy, according to the Adviser Confidence Index, a benchmark that gauges advisers' views on the economy. Put together by AdvisorBenchmarking Inc....

Wall Street earnings soar.(Short Interests)
July 19, 2004... Byline: Bruce Kelly NEW YORK - On Wall Street, the profits are once again resounding. According to the Securities Industry Association, Wall Street is on its way to posting its second-best year ever. Profits for the year are expected...

Economic optimism of wealthy households rises; June outlook brighter after May pessimism.(News)
July 19, 2004... Byline: Liz Skinner WASHINGTON - Wealthy households are optimistic about the U.S. economy and no longer appear worried about how the war in Iraq or the presidential elections will affect their portfolios. The economic outlook of...

Food pyramid NAVA's Rx for a healthy retirement.(News)
July 19, 2004... Byline: Calvin Dodge NEW YORK - In a bid to get investors to pay more attention to retirement planning, the National Association of Variable Annuities in Reston, Va., has launched a promotional campaign that likens retirees' investment...

Clients are the apple of William Tell Financial's eye, help it shoot straight; Advisory firm makes changes based on unique board's feedback.(News)
July 19, 2004... Byline: Bruce Kelly NEW YORK - A group of registered representatives has turned to its clients for ways to improve customer service. William Tell Financial Services LLC, Latham, N.Y., this year created a six-member board of directors,...

Latin American funds, on a roll since '03, could go south quickly; Category has outpaced broad market indexes, but caution is urged.(News)
July 19, 2004... Byline: Liz Skinner WASHINGTON - It has been fiesta time for investors in Latin American mutual funds for the past 18 months, though the investments aren't for the faint of heart. Funds invested in Latin America gained 32% for the 12...

Plan tuner strikes a chord with busy peers; Athough he's popular, he doesn't see payoff.(News)
July 19, 2004... Byline: Brooke Southall SAN FRANCISCO - Jacque LeFore is a financial planner who has no interest in managing investments or making cold calls to find retail customers. The Portland, Ore.-based entrepreneur is looking for a few good...

U.S. clearing firms ranked by number of clients.(Clearing Firms)
July 19, 2004... 1. Pershing LLC/BNY Clearing Services Number of clients: 1,100 Contact: James T. Crowley, managing director One Pershing Plaza Eighth Floor Jersey City, NJ 07399 Phone: (866) 269-8293 brokerage.info@pershing.com...

Smallest state yields a big winner.(Short Interests)
July 26, 2004... Byline: Meredith Deliso NEW YORK - The Certified Financial Planner Board of Standards Inc. in Denver has awarded Herman A. Ayvazyan, a recent graduate of Portsmouth (R.I.) High School, the second annual National Academy of Finance...

Press should avoid `financial pornography'.(Monday Morning)
July 26, 2004... Byline: Mike Clowes Financial planners and investment advisers have a tough-enough task keeping their clients focused on the long term and the essentials of successful investing without having to counteract poor advice in the daily...

Website made keener for teens.(Short Interests)
July 26, 2004... Byline: Charles Paikert NEW YORK - Call it a long-term investment. The National Endowment for Financial Education of Greenwood Village, Colo., has revamped its three-year-old website aimed at helping teenagers develop personal-finance...

Overreacting to abuses will undermine funds.(Other Views)
July 26, 2004... Byline: Pete Sepp It is no exaggeration to call the rise of the American "investor class'' a popular revolution and to recognize that mutual funds made the revolution possible. Two-thirds of middle-income households own shares in...

With Douglas Shulman of NASD.(One on One)
July 26, 2004... Byline: Sara Hansard Douglas Shulman is a fast-rising star at NASD. Just two years after joining the organization in 2000, he became president of markets, services and information, and a member of the office of the chairman. Mr....

AICPA, NAPFA team up on education.(Short Interests)
July 26, 2004... Byline: Rick Miller CHICAGO - The American Institute of Certified Public Accountants in New York and the National Association of Personal Financial Advisors in Arlington Heights, Ill., are teaming up for the first time to offer a...

SEC's plan to exempt thrifts irks FPA.(News)
July 26, 2004... Byline: Sara Hansard WASHINGTON - Financial advisers are pitted against the banking industry in an attempt to keep the Securities and Exchange Commission from exempting thrift institutions that manage trust accounts from registering as...

New tax form to increase corporate transparency.(Tax Watch)
July 26, 2004... Byline: Mark E. Battersby To increase the transparency of tax returns filed by large corporations, the Department of the Treasury and the Internal Revenue Service have released a draft of the final version of the new Schedule M-3, Net...

At the Bell; Morgan Stanley forms private-equity firm.(Late News)
July 26, 2004... Morgan Stanley of New York said Friday that it had signed a definitive agreement with a team of investment professionals from Morgan Stanley Capital Partners to finalize the establishment of Metalmark Capital LLC, an independent private-equity...

FPA forces issue on Merrill rule; Files suit to elicit response from SEC.(News)
July 26, 2004... Byline: Jeff Benjamin DETROIT - The Financial Planning Association has thrown down the gauntlet by filing a lawsuit that challenges the so-called Merrill Lynch rule. The suit will likely force the Securities and Exchange Commission to...

In-depth audits by SEC making RIAs dig deep; Code of ethics, fuller explanations likely to raise compliance costs.(News)
July 26, 2004... Byline: Bruce Kelly NEW YORK - Recent letters forewarning audits indicate the Securities and Exchange Commission is further toughening its stance on registered investment advisers. A letter the SEC sent to one RIA tells the firm it...

Trying to get ahead in a sideways market; Advisers feel pressure to keep their clients happy.(News)
July 26, 2004... Byline: Frederick P. Gabriel Jr. BOSTON - For many financial advisers, this is shaping up to be a summer of discontent. Rising interest rates, inflation worries, election-year jitters, and fears about terrorism have all conspired to...

Return to the hunt figures to boost AMG's profits; Belated closing helps reduce 2Q estimates.(News)
July 26, 2004... Byline: David Hoffman NEW YORK - Affiliated Managers Group Inc. is expected to report earnings this week, but though the company is back on the acquisition trail after a short break, some analysts said, don't expect earnings to meet their...

Microsoft butterfly is a free spender.(Reverse Spin)
July 26, 2004... Byline: Frederick P. Gabriel Jr. It's Christmas in July. On Tuesday, Microsoft Corp. of Redmond, Wash., said it plans to return more than $75 billion in cash to shareholders over the next four years. The company will begin by paying a...

Party may be over for natural resources sector; Overvaluation seen, particularly in oil.(News)
July 26, 2004... Byline: David Hoffman NEW YORK - Mutual funds that invest in the natural resources sector seem like the closest thing to a sure bet these days. Natural resources is the top- performing stock fund category year-to-date, according to...

Advisers applaud ouster of Pottruck as good sign; Some think Schwab should return to its roots.(News)
July 26, 2004... Byline: Frederick P. Gabriel Jr. BOSTON - Charles Schwab Corp.'s surprise announcement last Tuesday that chief executive David S. Pottruck had been sacked and replaced with founder Charles R. Schwab earned a standing ovation from many...

You gotta have heart.(Short Interests)
July 26, 2004... Byline: Julie Elena NEW YORK - Corporate leaders need savvy and smarts in today's business world, but without interpersonal skills and empathy, they may never reach the highest rung of success. That is how 265 executives, directors,...

Loss-harvesting funds no longer a bumper crop; Potential tax losses are being eaten through.(News)
July 26, 2004... Byline: Ilana Polyak NEW YORK - If there was a silver lining in the 2000-2002 market rout, it was that the funds that did the most damage to investors' portfolios at least wouldn't bring on the tax man. Years of losses at the hands of...