New York Attorney General Eliot L. Spitzer isn't just getting scandal-plagued mutual fund companies to cry uncle. He is going for their wallets, too.
As part of a proposed settlement with Mr. Spitzer's office, Alliance Capital Management Holding LP in New York is reportedly offering to cut its fees, according to published reports last week. That offer has nothing to do with allegations that the company allowed improper trading in its funds.
Securities and Exchange Commission Chairman William H. Donaldson recently chided Mr. Spitzer for trying to link lower fees with trading abuses. The SEC, which is also in settlement talks with Alliance, thinks the fee issue should be addressed only through new regulatory rules.
The dispute highlights the continuing turf war between Mr. Spitzer and Mr. Donaldson.
Newest additions
The rogues gallery of alleged mutual fund wrongdoers has some new portraits.
MFS Investment Management in Boston, which says it invented the mutual fund in 1924, said last week that the SEC is preparing to bring charges against it for allowing brokers and other select investors to market-time in 11 funds.
MFS, a unit of Toronto's Sun Life Financial Inc., is also under investigation for market-timing activities by Mr. Spitzer and Massachusetts Secretary of State William F. Galvin.
Meanwhile, Massachusetts regulators charged the former Prudential Securities Inc. on Thursday with widespread late trading to benefit favored hedge fund customers.
Between January 2001 and August 2003, brokers at the firm's Boston office allowed more than 1,212 illegal late trades, which netted more than $162.4 million, state regulators allege. Prudential Securities merged in July with Wachovia Securities LLC in Richmond, Va., but Wachovia says it is indemnified from the misdeeds by the previous owner.
Putnam's punt
After being fired by numerous pension funds, Putnam Investments LLC in Boston decided to do some terminating of its own.
Putnam, which recently settled market-timing charges with federal regulators, last month notified the Boilermakers Union Local 5 in New York that it would no longer be the investment manager for the union's retirement plan, according to reports last week.
Ten union members made more than 2,600 rapid trades in Putnam international funds that earned them $4 million in profits between 2000 and 2003, Massachusetts regulators said.
A union attorney said the traders, whose actions were legal, were just working guys who apparently paid more attention to the stock pages than the racing forms.
10000 or bust
Ending on a high note, the Dow Jones Industrial Average closed above 10000 last week for the first time in 18 months.
The surge came after the release of minutes from the Federal Reserve Board's Oct. 28 interest rate meeting. The Fed raised the possibility that even if the economy grows as forecasted, it may not need to raise interest rates until later next year or beyond.
In honor of hitting 10000 again, here are some fun index facts: The Dow first closed above 10000 on March 29, 1999, when it hit 10006.78.
Since then, the Dow reached a closing high of 11722.98 on Jan. 14, 2000, and a low of 7286.27 on Oct. 9, 2002.
It last closed above the mark May 24, 2002, finishing at 10104.26.
Closing Quote
"What opportunity does my wife have to really express her feelings and ask her questions if I'm both her husband and her planner?"
James Barnash, president-elect of the Financial Planning Association, on one reason he doesn't serve as his own financial planner. Page 66
