Fidelity

Lazard Capital employees charged in gift probe

Jim Kim — Fri, 31 Oct 2008 11:39:37 -0400

Lazard Capital Markets, which spun off from Lazard, has been charged with failure to supervise three employees who allegedly spent more than $800,000 improperly entertaining traders at Fidelity in an effort to win trading volume. Recall that a few Fidelity employees have already been charged with improperly accepting gifts. In many ways, this is a holdover issue from what now seems to be the distant past. There has been a sea change--notably the rise of commission sharing arrangements--in the way the buyside pays the sellside for execution services. In general, the whole soft-dollar issue has faded. That was quite an era for some buyside traders.

For more:
- here's a Financial News Online article

Hits keep coming for Legg Mason

Jim Kim — Thu, 30 Oct 2008 15:03:43 -0400

The credit crunch has been cruel to more than a few money managers. Bill Miller, the head of the Legg Mason Value Trust fund, is at the top of the list. He never gave up on financial stocks, even as they continued to crater. The old value mantras just plain let him down. He kept loading up on agency stocks as they fell--and fell. And that has now forced the fund to pare staff. Bloomberg reports that as many as 50 of 147 employees may be shown the door. Miller's main fund is down about 50 percent this year, and investors have fled. That isn't horrible considering that the market is down about 40 percent. And other funds are certainly hurting. Fidelity may lay of 400. Janus is also slashing. The Bloomberg article says Miller is reviewing his investment style. "Reviewing"? If he doesn't tinker, something's wrong.

For more:
- here's the Bloomberg article
- here's a Boston Globe article on Fidelity

Asset management opportunity for independents?

Jim Kim — Wed, 08 Oct 2008 12:04:39 -0400

Bloomberg offers an interesting article, suggesting that the woes of the big wirehouses may pose a once-in-a-lifetime opportunity for independent asset management firms. There's a lot of anger out there, and at least some of it is aimed at the big-name investment banks. So it would not surprise anyone if independents made a big marketing push right now, for both customers and brokers fleeing the likes of Morgan Stanley and Merrill Lynch. Charles Schwab and Fidelity--the two biggest RIA platforms--tell Bloomberg they are handling record business right now. But customers just might find out that the service offered at a small firm are not meaningfully different from a big firm. The line between a commission guy and a for-fee guy has been blurring for a while. But that's not anything that some tickets and freebies can't overcome.

For more:
- here's the Bloomberg article
- a view from the adviser trenches. Article

Credit crisis crunches Bill Miller

Jim Kim — Wed, 23 Jul 2008 13:35:48 -0400

In the annals of investing, Bill Miller remains a big name. Recall that he beat the S&P 500 for 15 years in a row until last year. In 2007, his Legg Mason Value Trust fund fell nearly 7 percent against a 5 percent gain for the S&P 500. Many thought that was an aberration. But the credit crisis is dashing hopes of a return to historical form, Fortune reports. The Legg Mason Value Trust lost 20 percent in the first quarter; Miller was long on a whole lot of financial stocks, including Citigroup and Countrywide. He told shareholders the worst was over, but clearly he was wrong. As of now, the fund is down a staggering 40 percent. He's hardly alone. Fortune notes several big-name funds--such as Fidelity's Growth and Income fund the Oakmark Select fund--that have gotten tripped up on financial stocks.

For more:
- here's the article

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Mutual fund industry suffers

Tue, 29 Apr 2008 06:59:56 -0400

These are eye-popping numbers. Retail investors are fleeing equity funds en masse. Even the likes of American Funds and Vanguard saw their assets drop 6.6 percent and 4.3 percent respectively, according to the Financial Times. At places such as Fidelity, customers are shifting into money market funds and the like, but those are lower margin products. The company recently saw an assets drop of 10 percent. Obviously, the industry is suffering at the moment; the most recent round of earnings was nothing to write home about. Only Pimco managed to eek out a gain in long-term assets. Values may be turning attractive. One analyst is now bullish on Invesco.

For more:
- here's the Financial Times article

C&L: Executive Moves

Wed, 23 Apr 2008 06:59:51 -0400

> Yvonne Wong to leave Merrill Lynch's Asian prime broker unit
> KKR hires Ken Mehlman as head of government affairs
> Thomas Montag may be hired by Merrill Lynch
> Thomas Flexner to join Citigroup
> Richard Evans to join Citi as Chief Risk Officer for institutions
> Claire Huang joins Bank of America from Fidelity

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C&L: Executive Moves

Wed, 02 Apr 2008 07:59:51 -0400

> Harvard endowment taps Jane Mendillo
> Ladenburg Thalmann names Brett Kaufman CFO
> Citigroup taps Jerome Anglade to start new credit fund
> Citigroup to hire Lloyd's Terri Dial
> Ilario Di Bon tapped as equities chief at Fidelity
> Lehman Brothers hires Mark Bourgeois for alternative investments

More on the Fidelity whistleblower

Mon, 31 Mar 2008 07:59:57 -0400

Jackie Hosang Lawson was a senior director at Fidelity Brokerage Services and apparently developed some "grave concerns" about the way the company reported profits for mutual funds. According to Financial News Online, she went to her supervisor with concerns and says she was ignored, which is one thing. But she also claims in court that she was subjected to retaliatory action that included shouting and the like. Even though Fidelity is a private company, it seems that Sarbanes-Oxley whistle blower provisions are being invoked.

For more:
- here's the article

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