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Two Fund Probes Continuing

Bank One and Janus say they are in communication with federal regulators.

March 10, 2004|From Bloomberg News

Bank One Corp., the Chicago-based bank being acquired by J.P. Morgan Chase & Co., and Janus Capital Group Inc. are in contact with U.S. regulators who are investigating allegations of improper mutual fund trading.

"We continue to cooperate with regulators," said Bank One spokesman Tom Kelly. He declined to comment further.

In November, Bank One said it expected a settlement in the next several months.

Janus, a Denver-based money manager, remains in "communications with the regulators," said company spokeswoman Shelley Peterson.

The two companies were among the first singled out in what's the biggest-ever probe of trading and sales practices in the $7.5-trillion U.S. mutual fund industry. New York Atty. Gen. Eliot Spitzer alleged in September that Bank of America Corp., Strong Capital Management Inc., Bank One and Janus allowed the Canary Capital Partners hedge fund to make improper trades.

Spitzer, the Securities and Exchange Commission and other state regulators have filed civil lawsuits against nine fund firms and 26 people, including criminal charges against seven, since Sept. 3 when Spitzer first revealed the probe. Last week Janus said it had provided information to the SEC, Spitzer and authorities in three other states.

BofA spokesman Robert Stickler declined to comment. The Charlotte, N.C.-based bank set aside $100 million in last year's third quarter to cover the cost of the regulatory probes. BofA, which is buying FleetBoston Financial Corp. for $48 billion, said in a March 1 filing with the SEC that it was possible additional charges would be required.

Janus, the ninth-largest U.S. stock and bond mutual fund manager, set aside $62.8 million in the fourth quarter for costs from the inquiry.

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