We got a look inside embattled Janus Capital Group (today as management discussed a review of its business following accusations of trading practices that hurt fund holders. The company’s take on what’s happening, however, is unlikely to assuage angry investors.
In a few short lines, CEO Mark Whiston said the company, following an internal investigation sparked by a complaint filed by the New York Attorney General’s office, found evidence of “several” frequent-trading events, though they were of “limited size and duration.”
“The bottom line,” according to Whiston, “is we’re committed to living up to the high ethical standards shareholders expect of us.”
Perhaps. But in public statements, arguably including this latest, Whiston and Janus don’t seem willing to admit that the actions under investigation have hurt the company’s reputation and deservedly so. When fund tracker Morningstar stopped rating Janus funds and said investors should “question their confidence” in Janus, for example, the CEO tried to divert attention to the company’s “good” history from its troubled present.
That seems insufficient. Janus (and other fund companies, the complaint says) allowed Canary Capital Partners special trading deals that, while not all illegal, used means undisclosed to fund holders to make trades that hurt retail clients while making money for institutions. Yes, allowed, as in business as usual approved at the highest levels of the organization. These were not the actions of rogue employees easily made scapegoats. While public flogging seems excessive, some penitence would be nice.