Mutual Fund Sales & Trading Practices

The Latest Legal Developments and Practical Strategies for Compliance in an Era of Change

Thursday, February 26, 2004

About

MUTUAL FUNDS ARE UNDER FIRE AS NEVER BEFORE. DO YOU KNOW HOW TO REDUCE YOUR RISKS?

On September 3, 2003, in a $40 million settlement with hedge fund Canary Capital Partners, New York State Attorney General Eliot Spitzer outlined allegations against some funds that they had allowed improper trading of their shares, thus putting their own interests ahead of those of their investors. And that was just the tip of the iceberg.

Since Spitzer's allegations, the investigation has expanded dramatically. Hedge funds, mutual funds, and financial management companies have found themselves under intense scrutiny from state and federal regulators, as well as Congress and the National Association of Securities Dealers, for issues including market timing, late trading, revenue sharing, soft dollars, disclosures, and governance.

As regulators keep the $6.8 trillion mutual fund industry in the headlines, everyone involved in mutual fund compliance - including in-house counsel and compliance officers at mutual funds and the intermediaries with whom they do business, as well as the outside attorneys advising them - must maintain an in-depth grasp of the developments of the past several months and their implications for compliance.

American Conference Institute has developed this publication on Mutual Fund Sales and Trading Practices to address the most pressing concerns of mutual fund companies and their intermediaries. It brought together a preeminent faculty of industry experts who gave up-to-the-minute information and valuable advice on:

  • The latest state and federal actions involving market timing and late trading
  • Mutual fund relationships with intermediaries
  • Organizing a trade department to facilitate best execution
  • Overcoming common problems in fund advertising
  • Selecting independent directors for mutual funds

Contents & Contributors

About

MUTUAL FUNDS ARE UNDER FIRE AS NEVER BEFORE. DO YOU KNOW HOW TO REDUCE YOUR RISKS?

On September 3, 2003, in a $40 million settlement with hedge fund Canary Capital Partners, New York State Attorney General Eliot Spitzer outlined allegations against some funds that they had allowed improper trading of their shares, thus putting their own interests ahead of those of their investors. And that was just the tip of the iceberg.

Since Spitzer's allegations, the investigation has expanded dramatically. Hedge funds, mutual funds, and financial management companies have found themselves under intense scrutiny from state and federal regulators, as well as Congress and the National Association of Securities Dealers, for issues including market timing, late trading, revenue sharing, soft dollars, disclosures, and governance.

As regulators keep the $6.8 trillion mutual fund industry in the headlines, everyone involved in mutual fund compliance - including in-house counsel and compliance officers at mutual funds and the intermediaries with whom they do business, as well as the outside attorneys advising them - must maintain an in-depth grasp of the developments of the past several months and their implications for compliance.

American Conference Institute has developed this publication on Mutual Fund Sales and Trading Practices to address the most pressing concerns of mutual fund companies and their intermediaries. It brought together a preeminent faculty of industry experts who gave up-to-the-minute information and valuable advice on:

  • The latest state and federal actions involving market timing and late trading
  • Mutual fund relationships with intermediaries
  • Organizing a trade department to facilitate best execution
  • Overcoming common problems in fund advertising
  • Selecting independent directors for mutual funds

Contents & Contributors

MUTUAL FUNDS UNDER FIRE: DEVELOPMENTS SINCE JANUARY 1, 2003
John A. MacKinnon, Sidley Austin Brown & Wood LLP

MUTUAL FUND INVESTIGATIONS: WHERE ARE WE? WHERE ARE WE GOING?
Michael A. Collora, Dwyer & Collora, LLP

THE ROLE OF MUTUAL FUND DIRECTORS IN PREVENTING MARKET TIMING AND LATE TRADING
Victoria E. Schonfeld, Wilmer, Cutler & Pickering

THE NEW REGULATORY SCHEME FOR THE MUTUAL FUND INDUSTRY
William M. Tartikoff, Calvert Group, Ltd.
Ivy Wafford Duke, Calvert Group, Ltd.

STALE PRICE ARBITRAGE AND LATE TRADING IN MUTUAL FUNDS
Eric Zitzewitz, Stanford Graduate School of Business

WHAT ELSE IS ON THE REGULATORS' RADAR SCREEN? RUNNING HEDGE FUNDS WITHIN A MUTUAL FUND GROUP
Kenneth S. Gerstein, Schulte Roth & Zabel LLP

SOFT DOLLARS AND BEST EXECUTION
Jay G. Baris, Kramer Levin Naftalis & Frankel LLP

AVOIDING THE PITFALLS IN FUND ADVERTISING
Richard F. Froio, BISYS

MUTUAL FUND ADVERTISING
Christopher P. Harvey, Hale & Dorr LLP

BEST PRACTICES IN MUTUAL FUND CORPORATE GOVERNANCE
Maureen Scannell Bateman, Bank of America

BEST PRACTICES IN MUTUAL FUND CORPORATE GOVERNANCE
Rose F. DiMartino, Willkie Farr & Gallagher



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