Sept. 8, 2003 — Janus Capital Group Inc. (JNS) said it will reimburse fund shareholders who may have been adversely impacted by the company’s market-timing practices as part of a slew of specific steps to address issues raised by New York Attorney General Eliot Spitzer, who is investigating trading practices in the mutual fund industry.
Among other steps, Janus will hire an outside firm to independently evaluate whether there was any monetary impact to any funds in which Janus permitted market timing.
Janus also will return to shareholders in the affected funds all management and advisory fees it received from these market-timing activities. Janus reports that the total investments by these market timers represented about $150 billion at the end of July.
The investigation was prompted by the Attorney General’s settlement with a hedge fund, Canary Capital Partners LLC, which allegedly engaged in irregular trading practices with certain mutual fund companies, including Janus.
Specifically, the Attorney General’s complaint alleged that in or about April 2002, Janus permitted Canary to “time” the Janus Mercury Fund (JAMRX). Canary timed the Mercury Fund during 2002 and 2003. Canary also received permission to “time” the Janus High Yield Fund (JAHYX).
“It’s our hope that the measures we’re announcing today will help resolve this situation in a way that recognizes the importance of the matter,” Mark Whiston, Janus’ chief executive officer said in a press release.