Janus Capital Group has shaken up its management team and reached a $226m settlement with regulator...
Janus Capital Group has shaken up its management team and reached a $226m settlement with regulators in a bid to draw a line under allegations of market timing.
The company has agreed to set up a $100m pool from which to compensate investors for the "adverse effects" of frequent trading and other mutual fund practices.
It has also agreed to reduce its management fees for the next five years and make $1.2m in settlement-related payments required by the state of Colorado.
Janus has also parted company with chief executive officer Mark Whiston - who is being replaced by Steve Scheid - but a spokesman insisted his departure had nothing to do with the settlement.
"No regulator has demanded his resignation," he said. "It was just felt that the timing was right to have new leadership running the firm."
The settlement was reached with the Attorney Generals of New York and Colorado, as well as the Colorado Division of Securities subject to approval by the SEC commissioners.
It is one of the largest to have been reached so far as a result of the investigations into the fund industry which have resulted in four other companies being fined and a handful of chief executives ousted.
The probe is on market timing, quick in-out-trades that although not illegal, are prohibited by most fund prospectuses. Janus was accused of permitting certain investors to time its funds, in exchange for investments from which it obviously earned fees.
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