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Topic: Mutual fund scandal (2003)

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	The Mutual Fund Industry Scandal
		Fund managers, being fiduciaries for their investors, are supposed to do their best to protect their customers from the dilution that late trading and market timing cause.
		Fund management fees increase with increased assets, and Canary was providing just that, investing millions of dollars in a long-term security while rapidly trading in and out of separate funds.
		The first requires that fund companies disclose fund timing policy more clearly in their prospectuses: The SEC aims "to shine some light on what has proved to be a dark and dingy corner in the mutual fund industry," SEC Chairman William Donaldson said in regards to market timing practices (Drawbaugh).
	www.jimmyatkinson.com /papers/fundscandal.html (2691 words)

	Discover the Wisdom of Mankind on mutual funds (Site not responding. Last check: 2007-10-21)
		Index funds typically have much lower expenses than actively managed funds, because the index funds trade so much less (they own the securities that an index "owns") and so are not burdened with the cost of finding and buying securities expected to outperform an index.
		In 1967 funds hit their best year, one quarter earning at least 50% with an average return of 67%, but it was done by cheating using borrowed money, risky options, and pumping up returns with privately traded "letter stock." By the end of the 60's there were 269 funds with a total of $48.3 billion.
		Mutual funds are also seen by some to have a systemic conflict of interest with regards to their size.
	www.blinkbits.com /blinks/mutual_funds (3903 words)

	Mutual Fund Scandal: Stock funds and mutual funds gain, despite the Mutual fund scandals.
		Such mutual fund scandals were unable to derail the gains in stock mutual funds however it shook the confidence of some market participants.
		US stock funds did well during the 2003 session, according to data by Lipper Inc., the average US stock fund was in the positive column with a net gain of 33% for the year.
		Attention is now focused on 2004, while fund manager Oberweis did not want to speculate on what kind of year 2004 would be for the markets, he however disclosed that he is loading up his stock fund positions with technology and health care stocks.
	www.hedgeco.net /mutual-fund-scandal.htm (1443 words)

	Mutual-Fund Scandal Clouds Bottom Lines
		Because money placed in a fund by a short-term trader was often just held as part of the portfolio's cash holdings and never invested in the market, there's a very close correlation between the market-timer's profits and the precise amount of money skimmed out of shareholder's accounts, investigators say.
		Neither the fund family nor the timer were identified by the investigators but they said over a three-month period, the timer made eight short-term trades.
		The fund kept about 3% of the portfolio in cash and the timer was allowed to trade up to 1% of the fund's assets.
	www.globalaging.org /pension/us/private/fundscandal.htm (1323 words)

	The mutual fund scandal and you - MSN Money
		Some fund officials and stock brokers have lost their jobs and could be barred from working in the industry again.
		Some of those implicated in the scandal have asserted they got legal opinions approving the trading in advance, which would be a strong defense in a criminal case.
		Funds from companies that are not implicated in the scandals are probably OK, and only some individual funds at accused firms were involved.
	moneycentral.msn.com /content/P66897.asp (1570 words)

	The Noble Pundit: Mutual Fund Misinformation
		I've touched on the mutual fund trading scandal just briefly mainly because I didn't find it to be overly surprising and the reporting that I had seen seemed to be relatively responsible in light of what was going on.
		The scandals basically revolve around the fact that the pricing of all mutual funds are estimates based on the last trade of the securities held by the fund.
		Mutual funds are not static with but a single investor trading one trade on a single day with everything else staying static.
	noble.cbnoble.com /archives/000866.html (2719 words)

	Mutual fund trading scandal
		Funds would not be required to actually execute the trades by closing time, but only to receive them (an interesting opportunity for continued mischief).
		The House provision can be found in section 205 of HR 2420, a major mutual fund reform bill that passed 418-2.
		The SEC is expected to issue a proposed rule on December 3 to address the mutual fund scandals.
	www.psca.org /er/dec03/scandal.asp (749 words)

	Mutual-fund scandal (2003) - Wikipedia, the free encyclopedia
		The mutual fund scandal of 2003 was the result of the discovery of illegal trading practices on the part of certain hedge fund and mutual fund companies.
		In many cases, funds bar or limit market timing because the practice may increase the cost of administering a mutual fund borne by all shareholders in the fund.
		The SEC is charged with the regulation of the mutual fund industry in the United States.
	en.wikipedia.org /wiki/Mutual_fund_scandal_(2003) (3174 words)

	Financial Policy Forum - Mutual Fund Scandal
		Fund companies used "soft dollars" or "bundled commissions" to transfer value out of mutual funds and into other spheres of their business.
		Fund companies practiced price discrimination in which retail customers are charged different management than larger institutional customers, such as trusts and endowments, for managing the same portfolio.
		Many hedge funds received subpoenas, others were named in complaints filed by the SEC of states' attorneys general and others were mentioned in the press as being linked to the scandal.
	www.financialpolicy.org /fpfspb13.htm (2739 words)

	Successful-Investment - Intelligence for the No Load Mutual Fund Investor
		The issue was that some mutual fund companies allowed certain hedge funds to engage in after-hours trading, sometimes incorrectly referred to as market timing.
		They have used this issue to pretty much ban all forms of trading their funds, and some companies are imposing hefty short-term redemption fees—penalties for all intents and purposes—in the name of avoiding impropriety.
		This was brought home to me when a fund manager of an $800 million mutual fund called me to see what my plans were in respect to holding our positions with his fund (about $2 million).
	www.successful-investment.com /articles29.htm (640 words)

	Mutual Fund Scandals - The Boston Globe
		For the first time since the mutual fund scandals unfolded, regulators are pressing a new set of people for answers to what went wrong: the trustees.
		The SEC named a veteran accounting industry lawyer to be the new chief of its Boston office, a post that has been at the center of the trading scandal engulfing the mutual fund industry.
		Mutual funds, big buyers of junk bonds sold by Michael Milken and others, suffered big losses when the junk bond market collapsed.
	www.boston.com /business/globe/mutual_fund_scandal (673 words)

	Mutual fund - Wikipedia, the free encyclopedia
		Turnover is a measure of the fund's securities transactions, usually in a year, and usually expressed as a percentage of net asset value.
		This essentially is a calculation of all the expenses of a fund divided by the average NAV for the year.
		Mutual funds often make taxable distributions near the end of the year (semi-annual and quarterly distributions are also fairly common).
	en.wikipedia.org /wiki/Mutual_fund (4352 words)

	The Mutual Fund Scandal: Unfair Fight - Newsweek Business - MSNBC.com
		Mutual funds were supposed to be the smart, safe choice for small investors.
		We knew mutual funds weren’t cheap, once you added up all their fees and expenses that on average chew up a quarter of your return.
		Hedge funds have been involved in most of the allegations of wrong-doing, which first surfaced in September when New York’s Spitzer brought a case against four fund companies and a big hedge fund, Canary Capital.
	www.msnbc.msn.com /id/3606191 (1493 words)

	How to Play the Fund Scandal (Ahead of the Curve) \| SmartMoney.com
		Suppose you own shares in a mutual fund, and you learn that the fund company that manages it has been fingered in the recent scandal over market timing and late trading.
		But with the hedge fund's $20 million in cash now sitting in the fund, that $10 million gain has to be divided across a larger fund value.
		That would mean the mutual fund's performance would be reduced by two basis points seven times — for 14 basis points — but improved by two basis points once, for a net performance loss of 12 basis points over a year.
	www.smartmoney.com /aheadofthecurve/index.cfm?story=20031114 (1488 words)

	USATODAY.com - Senators blast SEC over mutual fund trading scandal (Site not responding. Last check: 2007-10-21)
		Meanwhile, the SEC and the National Association of Securities Dealers, the brokerage industry's self-policing group, announced actions related to overcharges of large-scale investors in mutual funds, who could get tens of millions of dollars in refunds from brokers who failed to give them the discounts on commissions that they were owed.
		Securities lawyers have said intermediaries that process mutual fund share trades may be hiding late trading in the batch orders they send to funds.
		More broadly, the scandal has tarred the reputation of mutual funds, traditionally viewed as a safe, conservative investment.
	www.usatoday.com /money/perfi/funds/2003-11-03-fund-hearing_x.htm (1432 words)

	Mutual Fund Industry Scandal Topic Of Dec. 2 CU Panel Discussion \| News Center \| University of Colorado at Boulder
		The recent mutual fund industry scandal will be the topic of a Dec. 2 panel discussion presented by the University of Colorado at Boulder's Leeds School of Business.
		Called "Mutual Fund Scandal: Finance, Ethics and Remediation," the discussion will be held at 5 p.m.
		During the panel discussion, the audience will get a well-rounded explanation of the scandal involving the late-trading of mutual funds, according to Robert Kolb, assistant dean for the Business and Society Initiative at the Leeds School of Business.
	www.colorado.edu /news/releases/2003/444.html (381 words)

	BBC NEWS \| Business \| US mutual fund scandal spreads
		The chairman of a major US mutual fund has resigned amid an investigation into whether he benefited from improper trading.
		A lawyer for Richard Strong, head of Strong Mutual Funds, said on Sunday that he was standing down as the fund's chairman, though he will remain at the helm of its parent firm Strong Capital Management.
		Last week Massachusetts' state pension fund sacked Putnam Investments as manager of $1.7bn of its assets after the SEC charged the firm with improper trading.
	news.bbc.co.uk /1/hi/business/3236325.stm (295 words)

	Mutual Funds and Financial Advice from CNNMoney
		Nov 15: If you're starting to look for mutual funds you can live off, be careful: Some cash cows aren't all there cracked up to be.
		Nov 1: This time each year mutual funds tell investors their share of the tax hit for a year's worth of trading.
		Search among thousands of mutual funds for the one that meets your criteria.
	money.cnn.com /funds (692 words)

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