Investment News articles from March 2007

Investment News archives from March 2007

At the bell.
March 5, 2007... T. Rowe execs get rich pay packages T. Rowe Price Group Inc.'s former chief executive George A. Roche received $5.1 million in compensation last year, while current chief executive James A.C. Kennedy took in $5.7 million, according to a...

Oyster Bar powwow no pearl for Street.(Reverse Spin)
March 5, 2007... Byline: Charles Paikert It started, allegedly, at the Grand Central Oyster Bar and Restaurant in New York in 2001 as two old friends tried to settle a $25,000 debt. It culminated last week in one of the most "pervasive Wall Street...

Green index funds fight smog, global warming.(Short Interests)
March 5, 2007... Byline: Riva Froymovich NEW YORK - The FTSE Group's FTSE4Good Index Series has released a new set of standards for inclusion in the index. Those standards aim to identify companies behaving responsibly with regard to carbon dioxide and...

U-5 defamation issue comes to a head in N.Y. State's highest court likely to decide key case in the next few months.(News)
March 5, 2007... Byline: Dan Jamieson IRVINE, Calif. - Industry lawyers are watching closely how New York's highest court will settle a long- simmering battle over how much legal protection brokerage firms should have for statements made on so-called U-5...

Market slide may be blue chips' green light; Experts expect investors to shun riskier investments.(News)
March 5, 2007... Byline: David Hoffman PHILADELPHIA - Expect a change in leadership within the stock market that will favor blue-chip stocks over riskier investments, several market experts say. Last week's market volatility, which included the biggest...

A call to embrace tougher standards.(Editorial)
March 5, 2007... Hedge funds may complain, but the Securities and Exchange Commission is on the right track in considering whether to tighten the definition of the so-called qualified investor. At present, an investor must have an income of $200,000 a year...

To wealthy teenagers, living well comes naturally.(Short Interests)
March 5, 2007... Byline: Aaron Siegel NEW YORK - Teenage children of the silver-spoon set aren't that different from their peers - they just have more money. But they are well advised not to take their lifestyles for granted or swear off working for a...

Trade group takes AXA Financial's Condron to task.(Other Views)
March 5, 2007... Byline: Kim O'Brien In the Feb. 5 One on One, Christopher M. "Kip'' Condron, chief executive of AXA Financial Inc. in New York, [demonstrates] some gross misunderstandings about fixed annuities that [the National Association for Fixed...

Environmentalists may gain clout in buyouts; Deal for TXU could serve as model.(News)
March 5, 2007... Byline: Riva Froymovich NEW YORK - The impending private-equity buyout of Texas' largest electricity producer may give rise to more deals in which environmental lobbyists are invited to sit at the negotiation table. Last Monday, TXU...

Nearly twice the return, with just a little more risk.(The Markets)
March 5, 2007... Byline: Jeff Tjornehoj, U.S. investors who diversified their portfolios beyond our borders have been handsomely rewarded over the past several years for their foresight. International multi-cap funds (those that invest entirely outside...

Helping RIAs hand off to the next generation; Hurley's startup signs on 2 high-profile firms.(News)
March 5, 2007... Byline: Jeff Benjamin DETROIT - A newfangled model for helping independent investment advisory firms transition ownership to the next generation of employees has attracted two of the industry's more established financial planning...

New ETFs highlight belief that simple is good; WisdomTree thinks multifactor indexes say `active management'.(News)
March 5, 2007... Byline: David Hoffman PHILADELPHIA - WisdomTree Investments Inc. of New York is betting that when it comes to fundamental indexing - indexes weighted not by market capitalization but by other factors - the simpler, the better. That is...

Bill to end federal antitrust immunity worries insurers; Fear it could bring unfavorable attention from the FTC.(News)
March 5, 2007... Byline: Sara Hansard WASHINGTON - The life insurance industry is concerned that a bill which would eliminate federal antitrust immunity for insurance could lead to unfavorable attention from the Federal Trade Commission. In reaction to...

Younger, less optimistic.(Short Interests)
March 5, 2007... Byline: Lisa Shidler CHICAGO - Despite the uncertainty regarding the solvency of Social Security, 65% of respondents to a recent survey across all age groups said they expected it to be a primary source of income during retirement. ...

Former broker tells cautionary tale about criminal past.(Conference Call)
March 5, 2007... Byline: Brooke Southall SAN FRANCISCO - A former bad apple held the crowd captive at the Investment Management Consultants Association conference here last week. Patrick J. Kuhse, a former stock broker and supervisor at Planner...

Smith Barney finalizes broker pay plan; Expense accounts enhanced to help pay sales assistants.(News)
March 5, 2007... Byline: Dan Jamieson IRVINE, Calif. - In response to complaints from brokers, Smith Barney has tweaked the final version of its new pay plan. The new compensation package, effective at the start of this year, was finalized only last...

Hedge fund industry can't monitor itself.(Monday Morning)
March 5, 2007... Byline: Jim Pavia The presidential panel that decided there is no need for new hedge fund regulations obviously has incredible faith the industry can monitor itself. The President's Working Group on Financial Markets, which includes...

Opinion poll.
March 5, 2007... Previously, we asked you: Do you agree with last week's assessment by financial regulators that current regulations of hedge funds are sufficient to prevent widespread investor losses? Yes - 25.4% No - 64.3% Not Sure - 10.3% ...

Closing quote.(Reverse Spin)
March 5, 2007... "My kids still won't let me be banker in Monopoly.'' -Patrick J. Kuhse, a former broker who served time in prison for engaging in illegal kickbacks. He now is the principal of Speaking of Ethics in San Diego. Page 22

Advisers cool to Fidelity move to expand performance fees; Incentives encourage too much risk taking, according to critics.(News)
March 5, 2007... Byline: Kathie O'Donnell BOSTON - Fidelity Investments' plan to subject more of its adviser-sold mutual funds to performance-fee adjustments got a chilly response last week from some financial advisers who said such incentives could...

Insurers said to steer reps to in-house wares; Sales incentives seen as promoting conflicts of interest.(News)
March 5, 2007... Byline: Gary S. Mogel NEW YORK - Many insurers are providing incentives to their advisers to sell proprietary products, despite claiming to have "open architecture'' platforms, according to industry observers. MetLife Inc. in January...

American: Expect flows to slow; With returns near peers', some question adviser allocation.(News)
March 5, 2007... Byline: Brooke Southall SAN FRANCISCO - Buoyed by the firm's popularity with financial advisers, net inflows at American Funds have dwarfed its competitors' over the past five years. But executives at Los Angeles-based Capital Research...

Only half the battle.(Short Interests)
March 5, 2007... Byline: Lisa Shidler CHICAGO - Forty percent of advisers responding to a survey that was recently released exclusively to InvestmentNews said they weren't offering a retirement-income-planning service. MFS Investment Management Inc. of...

With Jonathan S. Thomas of American Century Investments.(One on One)
March 5, 2007... Byline: Kathie O'Donnell Long-time American Century Investments client Jonathan S. Thomas liked its mutual funds so much, he agreed to run the company. March 1, he officially succeeded William Lyons as president and chief executive of...

Moody's ups Linsco bond rating.(Short Interests)
March 5, 2007... Byline: Bruce Kelly NEW YORK - Good news for Linsco/Private Ledger Corp. bonds. Moody's Investors Service Inc. raised its rating for the various bonds of LPL Holdings Inc. to B1, from B2, last month. About $1.4 billion in Boston...

Web surfers cast away their worries.(Short Interests)
March 5, 2007... Byline: Gary S. Mogel NEW YORK - Visitors to a new website can obliterate their financial worries for free, courtesy of Northwestern Mutual Life Insurance Co. in Milwaukee. Visitors to wreckyourworries.com - an online game launched...

Innovative policy targets wealthy clients; Daily calculation of death benefits lowers policy costs.(News)
March 5, 2007... Byline: Gary S. Mogel NEW YORK - Advisers with clients who need life insurance for tax minimization and wealth transfer may want to consider a new policy geared to that market. The policy - which combines the tax-free death benefits of...

More investors are doing good in retirement; Plan sponsors warm to socially conscious and faith-based funds.(News)
March 5, 2007... Byline: Lisa Shidler CHICAGO - Socially conscious and faith-based investing is gaining traction in the retirement plan arena. While relatively few companies offer employees the opportunity to invest their 401(k) assets according to...

Former Wachovia manager charged in Ponzi-type scam; Other employees allegedly profited from the scheme.(News)
March 5, 2007... Byline: Bruce Kelly NEW YORK - A former Wachovia Securities LLC branch manager in Toledo, Ohio, has been charged with stealing between $17 million and $40 million from about 45 investors by using a Ponzi-type scheme, according to the...

Manager leaves no international stone unturned.(Street Wise)
March 5, 2007... Byline: Jeff Benjamin Investors worldwide have felt the wrath of the most recent volatility in the global-equity markets. Over the long term, however, there are always cases to be made for diversifying beyond U.S. stocks. David...

Big indie deal finally comes off; LPL to acquire three of Pacific's broker-dealers.(News)
March 5, 2007... Byline: Bruce Kelly NEW YORK - After eight months of negotiations, LPL Financial Services Inc. last Thursday finalized the details of its acquisition of three broker-dealers owned by Pacific Life Insurance Co. of Newport Beach, Calif. ...

Some consider 401(k) fees too low; Said to depend on services offered.(News)
March 5, 2007... Byline: Lisa Shidler CHICAGO - With a House panel scheduled to hold a hearing Tuesday to discuss whether the hidden fees in 401(k) plans are fair, at least one industry watcher is calling such fees too low and another says making general...

Calendar.
March 5, 2007... March 7 - Managing Fund-Level Compliance, HedgeOp Compliance LLC. HedgeOp headquarters, New York. (212)515-2800 or hedgeop.com/ general/seminar.asp. 7-8 - Second annual Women and Wealth Forum, Institutional Investor. Harmonie Club,...

Correction.(Correction notice)
March 5, 2007... An article in the Feb. 19 issue titled "Brokerages slow to reveal sales pact deals'' incorrectly stated that Pimco Funds of Newport Beach, Calif., had been targeted by the Securities and Exchange Commission in a case involving mutual fund shelf...

ACLI: Add group life to terror act.(Short Interests)
March 12, 2007... Byline: Sara Hansard WASHINGTON - If federal backing for terrorism risk insurance is extended past this year, group life insurance policies ought to be added to the coverage, the American Council of Life Insurers told Congress. In...

Closing quote.(Reverse Spin)
March 12, 2007... "People are running out of things to bet on. Now we're betting on Mother Nature.'' -Fadel Gheit, an oil and gas analyst at Oppenheimer & Co. Inc. in New York, on the Chicago Mercantile Exchange's introduction of hurricane futures and options....

India well positioned for surge in real estate; Mutual funds are being created to provide investment opportunities to foreign investors.(News)
March 12, 2007... Byline: Riva Froymovich NEW YORK - Real estate investment trusts don't exist in India, but investing in real estate there shows great potential, according to executives at Deloitte Touche Tohmatsu. "`REIT' in India stands for `real...

Ultrawealthy ultrahot as a market; Wealth managers target those with $40M to $50M.(News)
March 12, 2007... Byline: Charles Paikert NEW YORK - Ultrawealthy clients with investible assets of $40 million to $50 million rapidly are emerging as one of the most coveted segments of the wealth management business. "There's a huge effort going on in...

A couple of ports in the February storm.(The Markets)
March 12, 2007... Byline: Tom Roseen During the late-February mini-meltdown, a few sector equity funds provided investors some solace. Although many global bourses witnessed one-day losses ranging from 3% to 9%, utility funds (+2.58% for the month) and...

Wirehouse accounts don't match client goals; Transferred portfolios are poorly structured, Schwab study finds.(News)
March 12, 2007... Byline: Brooke Southall SAN FRANCISCO - In a huge survey of its clientele, Schwab Institutional documented what financial advisers have been screaming about for years. Accounts that clients transfer from wirehouse brokers have...

A new market emerges for Mother Nature; CME begins selling futures and options on hurricanes.(News)
March 12, 2007... Byline: Liz Skinner WASHINGTON - A new financial product will allow traders to bet on which way the wind blows. The Chicago Mercantile Exchange today began selling hurricane futures contracts and options on futures contracts. ...

FSI hopes to state case to SEC consultants; RAND Corp. to begin soliciting input on how advisers and brokers are regulated.(News)
March 12, 2007... Byline: Bruce Kelly NEW YORK - The Financial Services Institute Inc. hopes to bend the ear of the consulting firm chosen by the Securities and Exchange Commission to consider the effect on investors of applying differing regulatory...

Hedge fund industry's unease with media is all too obvious.(Editorials)
March 12, 2007... For more proof of the hedge fund industry's uneasy relationship with the media, consider last week's inaugural Connecticut World Hedge Fund Forum, co-sponsored by the state and the Connecticut Hedge Fund Association Inc. in Fairfield. ...

Index provider role may cross advice line; Potential for conflicts worth watching, SEC official says.(News)
March 12, 2007... Byline: David Hoffman NEW YORK - As indexes developed specifically for exchange traded funds proliferate, so do concerns about potential conflicts of interest that may exist when index providers reach for extra performance. The fear is...

SEC weighs raising bar on private-equity pools; Might extend higher accreditation standard it currently is proposing for hedge funds.(News)
March 12, 2007... Byline: Sara Hansard WASHINGTON - The Securities and Exchange Commission is considering whether to raise the financial bar for investing in private-investment pools other than hedge funds "We could raise the standards for every kind of...

Canadian seniors group calls for enforcement reform; Securities regulators also join chorus over `national disgrace'.(News)
March 12, 2007... Byline: David Clarke OTTAWA - It isn't that Canada doesn't have securities laws; it has lots of them. But there seems to be a problem with enforcement. "There is a serious problem of a broken white-collar-crime enforcement system in...

Research shows compliance costs rev up.(Short Interests)
March 12, 2007... Byline: Aaron Siegel NEW YORK - Although the administrative costs of complying with the Sarbanes-Oxley Act of 2002 have stabilized, the costs related to overall compliance spending are on the rise, according to a report released by AMR...

Shedding some light on leveraged-index funds.(Investment Strategies)
March 12, 2007... Byline: Ron Fernandes Are there any secrets left in our securities markets? We know that many mutual funds tend to underperform their benchmarks. We read about the daily proliferation of exchange traded funds in every conceivable...

There's nothing typical about this Eastern European fund.(Street Wise)
March 12, 2007... Byline: Jeff Benjamin The Metzler/Payden European Emerging Markets Fund (MPYMX) offers an example of an Eastern European strategy that thrives by staying off the beaten path. The four-year-old fund, which has $380 million in assets, is...

Opinion poll.
March 12, 2007... Previously, we asked you: Is last Tuesday's dramatic market decline a harbinger of things to come? Yes - 30% No - 58% Not sure - 12% Respondents: 313 This week's question is: Should shareholders be allowed to vote...

At the bell.
March 12, 2007... CFP Board backtracks on fiduciary stance In an apparent reversal, the Certified Financial Planner Board of Standards Inc. on Friday said that all certificants who provide financial planning services should be held to the duty of care of a...

Commonwealth plans to open its payout purse; Move will heat up competition for fee-based advisers.(News)
March 12, 2007... Byline: Bruce Kelly NEW YORK - Commonwealth Financial Network of Waltham, Mass., said it is giving pay raises to 400 of its advisers effective April 1, increasing the payout for advisers once they reach $25 million in assets on the firm's...

Shareholders should vote on exec pay.(Editorials)
March 12, 2007... Shareholders, who are understandably fed up with outrageous executive-pay packages and underperforming companies, may soon get a voice. House Financial Services Committee Chairman Barney Frank, D-Mass., recently introduced a bill that...

Baby boomers are tough customers.(Conference Call)
March 12, 2007... Byline: Lisa Shidler CHICAGO - The financial services industry is not effectively marketing its products and services to baby boomers and faces a huge obstacle in keeping them as customers, because they aren't loyal to financial...

When you talk trusts, don't forget about insurance.(Practice Management)
March 12, 2007... Byline: James Fiske A hot topic on the minds of many of your baby boomer clients is how to prepare for the transfer of their wealth to their children, relatives and other beneficiaries. To provide clients with holistic wealth...

Focus on reality, not entertainment.(Other Views)
March 12, 2007... Byline: William Berg In the investment world, many ignore crucial concerns to pursue something less important but more alluring. The investment world is full of many true and exciting things. Investing successfully is hard, because the...

Fed following yields results.(Short Interests)
March 12, 2007... Byline: Aaron Siegel NEW YORK- A portfolio manager will take investment tips from the Federal Reserve. Doug Roberts, the founder and chief investment strategist at Channel Capital Research Institute LLC in Shrewsbury, N.J., and a...

People.
March 12, 2007... Sentinel Financial Services Co. Inc. in Montpelier, Vt., has hired Jim Cronin as president. Sentinel Asset Management Inc., the company that manages Sentinel's fund portfolios, also has added Joseph DeVera as vice president, director of...

Galvin leads charge against senior fraud; Massachusetts regulations are the first to require proof of expertise.(News)
March 12, 2007... Byline: Charles Paikert NEW YORK - State regulators, led by Massachusetts' William F. Galvin, are stepping up their attacks on financial scam artists who prey on senior citizens. After filing charges against two annuity salesmen last...

NASD wants to supplant OSJ category; Concerns raised over proposed change in `branch' definition.(News)
March 12, 2007... Byline: Dan Jamieson IRVINE, Calif. - Industry observers are worried about the potential effect of an NASD proposal to eliminate the definition of "office of supervisory jurisdiction'' and in its place create four new branch-office...

401(k) ideas dissected at congressional hearing; Participants agree that fee disclosure must be improved.(News)
March 12, 2007... Byline: Sara Hansard WASHINGTON - The ideas of limiting 401(k) plan options to index funds and requiring all plan administrators to be brought under fiduciary duties were in focus last week at a congressional hearing on 401(k) fees. ...

Losing public trust and confidence.(Monday Morning)
March 12, 2007... Byline: Dan Jamieson One of the problems in covering Wall Street for a living is that my friends assume that I have hot stock tips or "inside knowledge'' of the market. I am not so quick to laugh off this simplistic view anymore. Those...

With Douglas P. Regan of Northern Trust Corp.(One on One)
March 12, 2007... Byline: Charles Paikert Being an English major with a concentration in poetry may seem like an unlikely starting point for a career in wealth management. And in fact, for Douglas P. Regan, it was. He is an executive vice president of...

LPL deal raises questions; Price, commitment to Pershing, the fate of United Planners' are big unknowns.(News)
March 12, 2007... Byline: Bruce Kelly NEW YORK - LPL Financial Services Inc.'s plan to acquire three broker-dealers owned by Pacific Life Insurance Co. came as little surprise to many in the industry, though the deal has raised a few key questions, industry...

Baby boomers creating opportunities for muni managers to sift through; Assisted-care facilities and alternative fuel `tricky and ... intriguing'.(News)
March 12, 2007... Byline: Aaron Siegel NEW YORK - The ever-evolving need for assisted-care facilities for the elderly and increased concern over energy policy have created opportunities for municipal bond portfolio managers. As baby boomers move closer...

Schwab, Cambridge blend efforts; Expand relationship to recruit, service dual registrants.(News)
March 12, 2007... Byline: Brooke Southall SAN FRANCISCO - After 15 years of serving their common clientele separately, Schwab Institutional and Cambridge Investment Research Inc. are showing those dually registered advisers a united front in recruitment,...

Unexpected trouble on direct non-spouse rollovers.(IRA Alert)
March 12, 2007... Byline: Ed Slott Transfers to non-spouse company retirement plan beneficiaries under the Pension Protection Act of 2006 are effective for 2007 (InvestmentNews, Jan. 29), but it turns out there may be problems and challenges in obtaining...

Grounds for income-trust tax cited as flawed.(Short Interests)
March 12, 2007... Byline: David Clarke OTTAWA - Unfazed by criticism of his controversial plan to tax income trusts, Canadian Finance Minister Jim Flaherty said that the March 19 federal budget is likely to include such legislation. On Oct. 31, he said...

OppenheimerFunds' Rochester unit rakes in the cash; Two of its muni offerings were parent firm's best sellers last year.(News)(Bibliography)
March 12, 2007... Byline: Kathie O'Donnell BOSTON - Municipal bonds - which finance projects such as roads and sewers - may not be the sexiest investments, but if investor inflows count for anything, OppenheimerFunds Inc.'s Rochester unit looks like Sophia...

ING reps rehab battered homes.(Short Interests)
March 12, 2007... Byline: Sam Lewis NEW YORK - Homes damaged by Hurricane Katrina were rebuilt by ING Financial Partners Inc.'s financial partners, who devoted a day to the project during the firm's recent Premier Partners Forum in New Orleans. About...

ETF industry sees birth of more rating services; Research provides `tools' helping advisers to make investment selections.(News)
March 12, 2007... Byline: David Hoffman PHILADELPHIA - The number of companies that rate exchange traded funds - and the methods they use to rate them - is growing. XTF LP of New York became the latest company to provide ETF ratings last month. The...

Watch out for falling BRICs, investors warned; Excessive liquidity, high expectations said to raise red flags.(News)
March 12, 2007... Byline: Riva Froymovich NEW YORK - Emerging-markets investors may have done well for themselves during the past four years, but there are several reasons why they might want to exercise caution in the coming months, according to one...

Paulson says everything is going to be OK.(Reverse Spin)
March 12, 2007... Byline: Charles Paikert Treasury Secretary Henry Paulson was on a tear last week in Asia, boosting the global economy and prodding the Chinese to speed up reforms in its financial markets. He downplayed the recent worldwide market sell-off...

Biodiesel industry heats up as number of plants rises; Investments aren't easy to come by, however.(News)
March 12, 2007... Byline: Deborah Nason NEW YORK - Once the domain of the Corn Belt, the biofuel industry is heating up across 41 states, thanks to the emergence of biodiesel. The term "biofuel'' refers to renewable liquid fuels made from plant matter...

Calendar.
March 12, 2007... March 13 - Fourth annual Homeland Security Conference, New York Society of Security Analysts Inc. NYSSA headquarters. nyssa.org. 21 - Forum on Derivatives, TABB Group. Reuters Building, New York. mrabkin@martinrabkinink.com. 26-27...

Some SMA money managers 'saying goodbye' to the biz; New business model, fee compression said to be causing exodus.(News)
March 12, 2007... Byline: Jeff Benjamin DETROIT - The latest evolution of the $800 billion separately managed accounts industry is expected to force more money managers to rethink their commitment to the business, sending ripple effects all the way to the...

Advisers working the tax system; Strategies crafted to help clients reduce payments.(News)
March 12, 2007... Byline: Lisa Shidler CHICAGO - Advisers are using creative techniques to work within the dense tax code to help their clients reduce their tax payments. Chief among these techniques is avoiding the onerous alternative minimum tax,...

Compatibility of pension funds, hedge funds questioned at hearing; Mix may be like oil and water, some caution.(News)
March 19, 2007... Byline: Sara Hansard WASHINGTON - The possibility of limiting pension fund involvement in hedge funds was raised last week by legislators and hedge fund industry representatives at a hearing on Capitol Hill on how much risk hedge funds...

Direct deposit could prevent ID theft.(Short Interests)
March 19, 2007... Byline: Riva Froymovich NEW YORK - As a way to combat identity theft, the Department of the Treasury's financial management service bureau launched a campaign this month to convince people who receive Social Security and other federal...

Seniors need protection from sales vultures.(Monday Morning)
March 19, 2007... Byline: Jim Pavia Senior investment fraud is right up there with taking candy from a baby or kicking a puppy. It is quite simply a despicable crime that should garner no sympathy for individuals who commit such offenses. It is a...

SSgA retools sales force in bid to boost ETF sales; Approach to emulate top dog Barclays.(News)
March 19, 2007... Byline: David Hoffman PHILADELPHIA - As exchange traded funds proliferate, ETF producers are getting more aggressive when it comes to pitching product. Just last week, in an effort aimed mostly at bolstering its ETF sales, State Street...

Accountants group weighs in on Canadian securities cop; Role of regulator in accounting issues is focus of paper.(News)
March 19, 2007... Byline: David Clarke OTTAWA - The Certified General Accountants Association of Canada has addressed the subject of a national securities regulator and has offered up suggestions about how it should work. At present, the provinces are...

At the bell.
March 19, 2007... A warm FPA reception for revised CFP code A revision of the Certified Financial Planner Code of Ethics is an improvement on the previous proposal, but requiring planners to take on fiduciary liability "will have to be carefully examined,"...

Quotas tied to benefits irk advisers; Some insurers link proprietary sales to health insurance.(News)
March 19, 2007... Byline: Gary S. Mogel NEW YORK - Some insurers are taking away their advisers' group health insurance and other employment benefits if proprietary-product quotas aren't met, advisers say. The life insurance industry uses quotas -...