NASD Asks Janus for Info in Trading ProbeNov 12, 2003 | AP
Janus Capital Group Inc., already under scrutiny by state and federal regulators for improper mutual fund trading, said Wednesday it also has been asked to submit information to the National Association of Securities Dealers as part of a similar investigation.
The brokerage industry's self-policing group asked for information about agreements to distribute mutual fund company shares through broker-dealers, Denver-based Janus said in a filing with the Securities and Exchange Commission.
Janus spokeswoman Shelley Peterson said the company was cooperating with all regulators who have requested information.
Janus was one of four mutual fund managers New York Attorney General Eliot Spitzer named earlier this year in a complaint accusing hedge fund operator Canary Capital LLC of after-hours trading and market-timing mutual funds practices that hurt long-term shareholders by skimming profits.
Janus had previously disclosed it had 12 short-term, or market timing, arrangements that have since been scrapped. Company officials said the investments by market timers represented less than 0.25 percent of its $150 billion in assets as of the end of August.
On Wednesday, Janus also said it believed there were several discretionary frequent trading arrangements in its offshore mutual fund business, which have been terminated.
Janus has said it plans to return about $1 million in fees it made from short-term trading arrangements available only to select investors. The practice isn't illegal, but it is prohibited by many mutual funds and discouraged by others, including Janus.
Janus has allocated $9 million related to investigations into its mutual fund trading but it also faces a number of civil lawsuits stemming from Spitzer's complaint.
The company said it had $149.8 billion in assets under management at the end of October, up from $144.9 billion a month earlier.
Janus did not release inflows or outflows for October, but the amount of money Janus managed lagged the 5.5 percent gain in the Standard & Poor's 500 index for the month, suggesting some investors may be pulling money out of Janus.