Investment News articles from October 2006

Investment News archives from October 2006

China temporarily freezes licensing for brokerage firms; Wants to give local firms chance to clean up acts, limit outside competition.(News)
October 2, 2006... Byline: Riva Froymovich NEW YORK - The China Securities Regulatory Commission has temporarily halted issuing new licenses for both domestic and international brokerage firms, leaving The Goldman Sachs Group Inc. and UBS AG as the only...

Specter: Increase insider-trading prosecutions; Senator concerned about violations by hedge funds.(News)
October 2, 2006... Byline: Sara Hansard WASHINGTON - More criminal cases should be brought against hedge funds and others for insider-trading violations, Senate Judiciary Committee Chairman Arlen Specter, R-Pa., told the head of the Securities and...

Lessons from Amaranth helpful for clients.(Editorial)
October 2, 2006... Investment advisers and their clients can learn, or relearn, lessons from the multibillion-dollar losses of Amaranth Advisors LLC. Some of these lessons advisers understand well, but clients don't, so they bear repeating. The...

With Rodney P. Wood of Wilmington Trust Wealth Advisory Services.(One on One)
October 2, 2006... Byline: Charles Paikert Rodney P. Wood, executive vice president of Wilmington (Del.) Trust Wealth Advisory Services, traces his interest in the banking business to his father's grocery store in Michigan. While working there as a...

SEC reporting deadline is a big burden.(Monday Morning)
October 2, 2006... Byline: Jim Pavia As the editor of a weekly newspaper, deadlines are my life. If our staff members didn't do their jobs and hit deadlines, InvestmentNews wouldn't publish on time. To be blunt: I can't tolerate missed deadlines. ...

Rydex brings institutional strategies to the masses; Three new funds feature alternatives, hedge fund tactics.(News)
October 2, 2006... Byline: Riva Froymovich NEW YORK - Rydex Investments last week launched three funds of mutual funds for individual investors - but with institutional-style asset classes and a strategy that mimics the behavior of hedge funds. The three...

Canadians shrug off the Amaranth meltdown; Pension funds not cutting back hedge fund exposure.(News)
October 2, 2006... Byline: David Clarke TORONTO - The problems of Amaranth Advisors LLC began in their country, but Canadians have taken them in stride. The Greenwich, Conn.-based hedge fund saw more than 60% of its assets vanish last month because of...

OTS rule proposal puts investors and bankers at odds; Funds oppose rule change governing employee stock benefit plans.(News)
October 2, 2006... Byline: Sara Hansard WASHINGTON - A regulatory proposal is pitting hedge funds and mutual funds against community-based thrift mutual holding companies. The Office of Thrift Supervision in Washington is proposing a rule change that...

Closing quote.(Opinion)
October 2, 2006... Byline: Richard Lashley "It [would be] a preordained outcome. It would be Cuba. Castro would win by default It could be the most horribly run company, and minority shareholders will have no say." Richard Lashley, principal of PL...

Paulson hints at revised entitlements push.(Other Views)
October 2, 2006... Byline: Milton Ezrati If the public utterances of the new Treasury secretary, Henry Paulson, are any indication, the administration seems set to take another run at entitlements reform - even Social Security privatization - this time with...

Decisions, decisions.(Short Interests)
October 2, 2006... Byline: Lisa Shidler NEW YORK - 401(k) plan participants are the first to admit that they are clueless when it comes to choosing their own investments. In a recent survey by John Hancock Retirement Plan Services in Boston, 69% of...

American College of Surgeons launches fund; It aims to invest up to 100% of assets in ETFs.(News)
October 2, 2006... Byline: Kathie O'Donnell BOSTON - The American College of Surgeons has launched its first mutual fund in a bid to help many of its roughly 70,000 members - especially younger ones - save money now that the medical profession isn't as...

Glauber reappointed to insurer's board.(Short Interests)
October 2, 2006... Byline: Gary S. Mogel NEW YORK - Former NASD chairman and chief executive Robert R. Glauber on Sept. 21 was reappointed as a director of a Bermuda insurer - a position he resigned from last year following publicity surrounding the...

For the wholesaler, a wholesale change; They add advice, practice tips to new carpetbag.(News)
October 2, 2006... Byline: Jeff Benjamin DETROIT - Money management firms are becoming increasingly creative in their attempts to gain access to the swelling ranks of more than 300,000 financial intermediaries responsible for bringing investment products...

NASAA arbitration stance draws fire; Defense bar says regulators fail to give it a hearing in debate over industry panelists.(News)
October 2, 2006... Byline: Dan Jamieson IRVINE, Calif. - Securities industry observers are expressing dismay that state regulators are pushing for elimination of the requirement that NASD arbitration panels include industry representatives. The issue...

European, Pacific theaters heating up.(The Markets: International Funds)
October 2, 2006... Byline: Tom Roseen Lipper Senior Research Analyst Despite continued geopolitical concerns, returns remain strong for many types of world-equity funds. Emerging-markets funds and related regional funds have garnered much of the...

Investor group applauds Sears.(Short Interests)
October 2, 2006... Byline: Aaron Siegel NEW YORK - Sears Holdings Corp. has completed a makeover of its "Code of Vendor Conduct and Guidelines'' and didn't need its spokesman, Ty Pennington, from the "Extreme Makeover: Home Edition'' television show to do...

John Hancock to replace 44 outside VA mutual funds; Substitution with proprietary offerings irks advisers.(News)
October 2, 2006... Byline: Gary S. Mogel NEW YORK - John Hancock Life Insurance Co. last month sent its variable annuity sales force a "Supplement to Prospectuses'' listing 44 outside VA mutual funds and the proprietary VA funds with which they are being...

Morgan Stanley shoots for rising stars.(At the Bell)
October 2, 2006... Morgan Stanley in New York is trying to attract young talent by out-recruiting competitors, according to published reports. To do so, the firm has lowered targets for revenue and assets under management to qualify for its "rising star''...

Report suggests ways to solve asset manager bottlenecks; Adviser not reached when firms develop products in a vacuum.(News)
October 2, 2006... Byline: Aaron Siegel NEW YORK - As investment management has taken a turn toward the institutional end of the spectrum, asset management firms have lost touch with the ever-changing needs of their distribution partners, according to a...

Royal Alliance shakes up management, adds clearing firm; New CEO puts own stamp on BD.(News)
October 2, 2006... Byline: Bruce Kelly NEW YORK - Larry Roth, CEO of Royal Alliance Associates Inc., has wasted no time in putting his stamp on the firm. Mr. Roth, who replaced the popular Mark Goldberg at the helm of the New York-based...

Indies on the upswing in terms of profitability; Three-quarters of companies in the black in 2005.(News)
October 2, 2006... Byline: Dan Jamieson IRVINE, Calif. - Independent broker-dealers' profitability is on the upswing. More than three-quarters of firms were profitable last year, up from just over half in 2001, according to the results of a study...

SEC does the right thing on fund rule.(Reverse Spin)
October 2, 2006... Byline: Charles Paikert Other branches of government may be (and are) criticized for being intransigent and stubborn, but you can't really tar the Securities and Exchange Commission with that brush. Last week, the SEC struck a blow for...

Small-cap manager likes long-term commitments.(Street Wise)
October 2, 2006... Byline: Jeff Benjamin Michael Cook, chief executive of Michael W. Cook Asset Management Inc. in Memphis, Tenn., doesn't necessarily believe in taking the easiest and most direct route to finding undervalued stocks. And once he finds a...

Chicken Little Growth Fund no turkey.(Short Interests)
October 2, 2006... Byline: Kathie O'Donnell BOSTON - The Chicken Little Growth Fund (CHKNX), ranked by Kiplinger's Personal Finance magazine as the nation's No. 1 large-cap mutual fund for the year ended Aug. 18, has the sky nailed firmly in place - at least...

Pension act creates cross-selling dilemma; Fiduciary adviser role in 401(k)s unclear, FPA and an industry expert contend.(News)
October 2, 2006... Byline: Lisa Shidler CHICAGO - Recent pension legislation leaves unclear the role of the fiduciary when cross-selling is involved, causing industry observers to warn financial advisers that it is essential to understand the intricacies of...

Eaton sees opportunity in rivals' distractions; But passing MFS might not be enough.(News)
October 2, 2006... Byline: Kathie O'Donnell BOSTON - Eaton Vance Corp. chief executive James Hawkes last week said that deal-related distractions at other mutual fund firms could continue to help his company - now just $42 million behind crosstown Boston...

New book aimed at younger investors.(News)
October 2, 2006... Byline: Riva Froymovich NEW YORK - Investors waiting for the appearance of wrinkles before embarking on a retirement planning strategy are not "dummies'' or "fools,'' as other books might call them, said Brian T. Jones, author of "Getting...

Some say Thai coup spells opportunity.(Short Interests)
October 2, 2006... Byline: Riva Froymovich NEW YORK - When Thailand's military took over its government in a bloodless coup late last month, the country's stock market began swinging like a pendulum. On Sept. 19, the day Prime Minister Thaksin Shinawatra...

Advisers embrace long/short strategies; Slowing market, modest return forecasts have increased interest in this tactic.(News)
October 2, 2006... Byline: David Hoffman PHILADELPHIA - More financial advisers are employing long/ short strategies, making a tactic once used primarily by hedge funds more mainstream. The trend is being driven by the popularity of hedge funds that use...

Wealth management growth spawns new associations, services; Proliferation of entities gets mixed reception; some question the need for them.(News)
October 2, 2006... Byline: Charles Paikert NEW YORK - As the number of wealthy investors continues to climb, so do the ranks of professional associations and businesses that cater to wealth managers. Last week, the newly formed Wealth Advisor Institute...

Brokers laud easing of fine guidelines; NASD now says size matters when imposing levies.(News)
October 2, 2006... Byline: Bruce Kelly NEW YORK - Small fry broker-dealers are claiming a big victory over the brokerage industry's leading self-regulator. Last week, NASD said that it had changed its guidelines regarding sanctions and penalties for...

Opinion poll.(Opinion)
October 2, 2006... In last week's poll, 108 readers responded, with 71.3% saying financial advisers and stockbrokers shouldn't reduce their clients' exposure to commodities in the wake of Amaranth Advisors LLC's multibillion-dollar loss on natural-gas...

Yahoo! survey aims to quantify factors that influence advisers' online behavior; Its Finance site, Morningstar listed as top two sources.(News)
October 2, 2006... Byline: Aaron Siegel NEW YORK - Yahoo! Inc. has made a concerted effort to quantify the factors that have the greatest influence on the online behavior of advisers and broker-dealers, and the best way that that they can be reached by...

LETTERS.
October 2, 2006... Belief in doing the right thing In regard to your Sept. 4 Monday Morning column, with your permission, I may have to start distributing your article regarding Danny and Tim to prospective clients. I, not unlike a lot of advisers, have...

Banks seek to refine number of annuity insurers; Financial strength, product offerings are key selection criteria.(News)
October 9, 2006... Byline: Gary S. Mogel NEW YORK - One-fourth of large banks thought that the number of their annuity insurers was too big, another fourth thought the number was too small, and half thought it was just right, according to a survey to be...

Onward, Christian poll takers.(Short Interests)
October 9, 2006... Byline: Polya Lesova NEW YORK - A majority of respondents to recent polls by ChristiaNet.com Inc. said they didn't think that using credit cards or credit repair services was a problem for Christians, but they weren't so sure about day...

Cutting fees inside 401(k)s.(Short Interests)
October 9, 2006... Byline: Lisa Shidler CHICAGO - Presidium Retirement Advisers Inc. is helping employers slash fees inside their 401(k) plans. The Charlotte, N.C.-based firm is growing and recently lured top-producing advisers who had worked for...

Convergence of private-equity and hedge funds.(Conference Call)
October 9, 2006... Byline: Aaron Siegel NEW YORK - Convergence between hedge funds and private-equity funds is becoming the status quo, according to a report released last Wednesday by the Association for Corporate Growth and Grant Thornton LLP. The...

Value equity manager steers clear of hot trends.(Street Wise)
October 9, 2006... Byline: Jeff Benjamin Don't expect Charles A. Smith to flinch at just any old stock market gyration - or even a market move that has lasted several years. Possibly the most vivid example of his dedication to his investment strategy is...

Congress needs to restore fairness to the tax system.(Monday Morning)
October 9, 2006... Byline: Jim Pavia By failing to renew important tax relief for middle-class taxpayers and small businesses, Congress basically is turning its back on millions of hardworking Americans. Middle-class and business tax cuts about to expire...

NASD should proceed with caution.(Editorial)
October 9, 2006... NASD is under pressure to change the composition of its three-member arbitration panels, but it must not be rushed into changes. It should resist pressure for changes from such groups as the North American Securities Administrators...

Pension reform law jump-starts hybrid LTC products; Coverage is combined with annuities, life insurance.(News)
October 9, 2006... Byline: Gary S. Mogel NEW YORK - Many insurers are jumping on the long-term-care hybrid-policy bandwagon thanks to the recently passed Pension Protection Act's tax advantages, according to industry experts. Money taken from an...

American Funds' donor fund worrisome to some; Leery of paying brokers to get clients to donate.(News)
October 9, 2006... Byline: Brooke Southall SAN FRANCISCO - A small charitable-giving program quietly started by American Funds has won over many community foundations, but others say it's not for them. The mutual fund giant's program now is available...

New John Hancock, Prudential ads focus on retirees; Campaigns position investors in the driver's seat.(News)
October 9, 2006... Byline: Liz Skinner WASHINGTON - Two financial services companies are rolling out advertising campaigns this month that position investors in the driver's seat and financial professionals under the hood when it comes to retirement. ...

Finding the multisector-bond-fund solution.(Investment Strategies)
October 9, 2006... Byline: Christopher Lazzaro The general rule of thumb for managing portfolios for individuals nearing retirement is to begin lowering exposure to riskier investments such as stocks and increasing exposure to fixed-income securities or...

Name a leveraged fund for what it is.(Editorial)
October 9, 2006... When an investment fund leverages its positions five times, is it really a hedge fund? The name "hedge fund'' implies that the risky investments are hedged, but too often in hedge fund land, that is not the case. Perhaps the...

Political harmony helps equity returns, report says; Bonds do better than stocks during periods of gridlock.(News)
October 9, 2006... Byline: Aaron Siegel NEW YORK - With the prospect of an imminent changing of the political guard on Capitol Hill, the potential that the midterm elections could deliver equity returns that are more volatile comes into play, according to a...

People.
October 9, 2006... Thrivent Investment Management, a Minneapolis-based unit of Thrivent Financial for Lutherans, has appointed Douglas D. Sims, 60, to its mutual fund board of directors. Mr. Sims is the former chief executive officer of Greenwood Village,...

New pension legislation to bring more focus on 401(k)s, especially fees.(Conference Call)
October 9, 2006... Byline: Lisa Shidler CHICAGO - The new pension legislation will bring more attention to the 401(k) industry, according to the head of a group that mainly represents retirement-plan sponsors. "The defined contribution system will be...

With Mark Casady of LPL Financial Services Inc.(One on One)
October 9, 2006... Byline: Bruce Kelly Mark Casady had a busy summer. The 46-year-old chairman, chief executive and president of LPL Financial Services Inc., by far the largest independent-contractor broker-dealer, oversaw an acquisition in August and...

Understanding ERISA's safe-harbor requirements.(Fiduciary Corner)
October 9, 2006... Byline: Donald B. Trone The Secretary of Labor has recently released proposed procedures that would amend safe-harbor requirements for retirement plan sponsors. The proposed procedures address the details of the "default investment...

Study grades companies on environmental efforts; Coal, food products, air transport fare worst.(News)
October 9, 2006... Byline: Aaron Siegel NEW YORK - While some groups look at earnings reports to check a company's financial vital signs, others test the air for firms that give off particles that can be detrimental to the environment. A recent report...

Schroders expansion of fund lineup goes global; Firm tries to deliver to financial advisers what they want.(News)
October 9, 2006... Byline: David Hoffman PHILADELPHIA - The trend toward fee-based advice is one reason Schroders PLC thinks that now is the right time to expand its no-load mutual fund lineup in the United States. That trend fits in with the way the...

Evergreen losing portfolio pros to boutiques, startups; Talent outflow follows changes in bond biz, comp.(News)
October 9, 2006... Byline: Mark Bruno NEW YORK - Evergreen Investments has been plagued by a rash of employee turnover in recent months, losing roughly 20 investment professionals, including several teams. Until now, the Boston-based money management...

Mutual funds in Japan on the verge of a boom; U.S. firms find distributor relationships, retail market are key.(News)
October 9, 2006... Byline: Mark Bruno TOKYO - To understand the future of the money management industry in Japan, consider Kin-san and Gin-san - twin sisters who became almost instant pop stars when they reached the age of 100 in 1992. For their...

At Big Board, the trades are moving off the floor; `Hybrid market' expected to hurt independent brokers.(News)
October 9, 2006... Byline: Aaron Elstein NEW YORK - Every day for the past 25 years, Daniel Tandy has worked on the floor at the New York Stock Exchange, making trades for his customers. He may not make it to his 26th anniversary. The exchange last...

Working to demystify women.(Short Interests)
October 9, 2006... Byline: Polya Lesova NEW YORK - Selling to women has its own rules, but to many those rules are a mystery. As a result, WM Funds Distributor, the distributor for the Seattle-based WM Group of Funds, has hired marketing expert Delia...

Principal launches rollover education effort for advisers; Many aren't seen ready to deal with flood of IRA money.(News)
October 9, 2006... Byline: Lisa Shidler CHICAGO - The Principal Financial Group Inc. is stepping up its effort to educate financial advisers about different strategies to roll over individual retirement accounts. Although many advisers say they...

Election time means party time for indexes.(Short Interests)
October 9, 2006... Byline: Aaron Siegel NEW YORK - The major indexes always seem to have a party during the midterm elections, regardless of which political party emerges victorious. Since 1986, the Dow Jones Industrial Average, the Standard & Poor's...

Bank oversight relief extended to S&L trust departments; SEC and federal bank regulators expected to reach consensus.(News)
October 9, 2006... Byline: Sara Hansard WASHINGTON - Savings-and-loan trust departments will join banks in being exempt from Investment Advisers Act requirements under bank regulatory relief legislation that Congress approved last month. The Financial...

California claims victory in fighting Reg D fraud; Ruling underscores states' powers.(News)
October 9, 2006... Byline: Dan Jamieson IRVINE, Calif. - California is claiming that a federal court decision last month involving a private placement helps confirm the power of state regulators to step in and prevent potential fraud, even where no specific...

Allianz OKs broker end run around FMOs; Stance will let broker-dealers monitor EIAs more closely.(News)
October 9, 2006... Byline: Gary S. Mogel NEW YORK - Allianz Life Insurance Company of North America is changing the way it sells equity index annuities from a model based exclusively on "independent'' wholesalers to one in which large broker-dealers may...

Two firms seek to fill Domini's social-indexing void; Green Century Funds, Barclays Global are the first to step up.(News)
October 9, 2006... Byline: Ilana Polyak NEW YORK - When the Domini Social Equity Fund decided to abandon indexing and embrace active management in August, it left some investors stranded. In departing from its index strategy, Domini signed on...

Adding an insurance agent to wealth preservation team.(Practice Management)
October 9, 2006... Byline: Andrew McElwee Comprehensive financial planning should include a discussion about property, liability and other risks to a client's assets and family. Yet many wealth managers and financial planners aren't experts at managing...

Paperwork will grow for Canadian financial planners.(Conference Call)
October 9, 2006... Byline: David Clarke TORONTO - Canadian financial advisers are doing great, and the best is yet to come. That's the gist of what many speakers in Toronto told the 620 delegates at the Investment Funds Institute of Canada's 20th annual...

Controversial injunction against Conrad Black lifted; Who blinked first - the defendant or Hollinger?(News)
October 9, 2006... Byline: David Clarke OTTAWA - Conrad Black's assets are still frozen, but a controversial injunction that froze them for more than a month has been replaced by an agreement between the embattled former media magnate's lawyers and the...

REITs outperforming for seventh straight year; Average one is up 23.4% in 2006; rising rates not hurting performance.(News)
October 9, 2006... Byline: Ilana Polyak NEW YORK - No one expected real estate investment trusts to continue their dominance of the equity market for yet another year. But here it is, the seventh year of the REIT rise, and many real estate experts won't...

BrokersXpress adds separate accounts; Move by niche broker broadens its platform.(News)
October 9, 2006... Byline: Bruce Kelly NEW YORK - A niche independent-contractor broker-dealer that focuses on sophisticated investments such as options and futures has turned to a standard of the industry - separately managed accounts - to broaden its...

Egan-Jones to rate mutual funds; Aims to compete with the major ratings companies.(News)
October 9, 2006... Byline: Sara Hansard WASHINGTON - With the market for credit-rating services opening up under a law recently signed by President Bush, a credit-rating firm not currently recognized by the Securities and Exchange Commission is planning to...

Emerging markets test socially conscious investors; Companies in developing countries can't be held to highest standards.(News)
October 9, 2006... Byline: Riva Froymovich NEW YORK - Socially conscious investors may need to compromise their principles and consider the cultural context of foreign companies when looking to invest in emerging-markets countries, according to a new study...

SunGard's PlanningStation adds cash flow module.(Product Watch)
October 9, 2006... SunGard Online Investment Systems in Salt Lake City has released a new version of PlanningStation, a financial modeling and planning solution for financial advisers. One new feature is the Cash Flow Consultant module, which analyzes cash...

Life insurer targets South Asians in U.S.(Short Interests)
October 9, 2006... Byline: Gary S. Mogel NEW YORK - Nationwide Financial Services Inc. this month is giving its life insurance sales campaign a South-Asian spin. The company's campaign will feature scenarios that are especially relevant to South Asians -...

Guaranteed-income annuities may appear inside Lincoln 401(k)s; But costs could raise fiduciary concerns, one critic says.(News)
October 9, 2006... Byline: Lisa Shidler CHICAGO - Lincoln Financial Group is closely investigating the possibility of including guaranteed-income annuities inside its 401(k) plans, following the recent creation of similar products, as the industry scrambles...

Overseas funds enjoy more wind in their sails.(The Markets)
October 9, 2006... Byline: Jeff Tjornehoj Although summer is often a period of slower market activity - hence the popular saw "Sell in May and go away'' - this year was clearly different, as investors saw their returns shift into higher gear. Because...

CFOs mull changes.(Short Interests)
October 9, 2006... Byline: Lisa Shidler CHICAGO - More than a quarter, or 28%, of companies had made changes or were considering making changes to their company's retirement plans as a result of the Pension Protection Act of 2006, according to a new survey...

Schwab to chuck advisers from referral program; Firm plans to cut loose 50% to 60% of the 320 total.(News)
October 9, 2006... Byline: Brooke Southall SAN FRANCISCO - Schwab Institutional is cutting more than half the advisers from its faltering referral program, according to advisers who have been told by the company that their fate hangs in the balance. The...

ICI taps Gallary as new COO.(At the Bell)
October 9, 2006... The Investment Company Institute said Friday that it had tapped Peter H. Gallary as its chief operating officer. He will be responsible for leading the ICI's finance, technology, membership relations, human resources and administrative...

New Florida licensing law challenges insurance industry; Filing deadline extended while state irons out some of the wrinkles.(News)
October 9, 2006... Byline: Dan Jamieson IRVINE, Calif. - A Florida insurance licensing law is giving financial services firms fits. The law, passed last year, implements an agency-office-licensing scheme. It requires branch offices of insurance agencies,...

Opinion Poll.(Opinion)
October 9, 2006... Previously, we asked you: Is the Dow Jones Industrial Average likely to end the year above 11,722.98, the then-record close it reached Jan. 14, 2000? This week's question is: Does Schwab Institutional's decision to cut more than...

Closing quote.(Reverse Spin)
October 9, 2006... "The truth is, most of these people don't even know what a hedge fund is, and if they work in government, you know they don't have the money to invest in one.'' Randall Steinmeyer, board member of the New York-based Hedge Fund Association,...

Some investors feeling the pinch of housing slump; `Creative financing' is concern for advisers.(News)
October 9, 2006... Byline: David Hoffman PHILADELPHIA - For evidence that the boom in residential real estate is over, look no further than the man who sought his fortune in Colorado but lost his shirt. The man apparently decided to invest in "high end''...

Economists clash on effect of housing slide.(Reverse Spin)
October 9, 2006... Byline: Charles Paikert Federal Reserve Board Chairman Ben Bernanke last week conceded that the housing sector is undergoing a "substantial correction'' that is likely to take about "a percentage point off growth in the second half of the...

Conn. creates unit to oversee hedge funds, to mixed reviews; Move seen as bypass around lack of regulation.(News)
October 9, 2006... Byline: Jeff Benjamin DETROIT - Sidestepping at least two failed attempts this year by Connecticut lawmakers to introduce new rules related to hedge fund oversight, the state's department of banking has created a hedge fund unit to help...