April 27, 2004 — Janus Capital Group (JNS) said it reached a preliminary agreement with state regulators to pay $100 million to settle allegations that it allowed improper trading in its mutual funds.
The company said it also reached a similar agreement in principle with the staff of the Securities and Exchange Commission, but did not disclose monetary terms of the proposed settlement.
Under the agreement with New York and Colorado regulators, Janus will establish a $100 million pool that will be used to compensate investors for rapid-fire share trading and other improper practices. Of that total, $50 million will go towards civil penalties. Janus also will make $1.2 million in other settlement-related payments required by Colorado.
In addition, the company agreed to reduce its fund management fees by about $25 million per year for the next five years.