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11/13/2003

Dealers seek info from Janus

The Associated Press

DENVER — Janus Capital Group Inc., already under scrutiny by state and federal regulators for improper mutual fund trading, said Wednesday it has been asked to submit information to the National Association of Securities Dealers as part of a similar investigation.

The brokerage industry’s self-policing group asked for information about agreements to distribute mutual fund company shares through broker-dealers, Denver-based Janus said in a filing with the Securities and Exchange Commission.

Janus spokeswoman Shelley Peterson said the company was cooperating with all regulators who have requested information.

Janus was one of four mutual fund managers New York Attorney General Eliot Spitzer named earlier this year in a complaint accusing hedge fund operator Canary Capital LLC of after-hours trading and market-timing mutual funds — practices that hurt long-term shareholders by skimming profits.

Janus had previously disclosed it had 12 short-term, or market timing, arrangements that have since been scrapped.

Company officials said the investments by market timers represented less than 0.25 percent of its $150 billion in assets as of the end of August.

Several employees central to the arrangements no longer work for Janus.

On Wednesday, Janus also said it believed there were several discretionary frequent trading arrangements in its offshore mutual fund business, which have been terminated.

Janus has said it plans to return about $1 million in fees it made from short-term trading arrangements available only to select investors.

The practice isn’t illegal, but it is prohibited by many mutual funds and discouraged by others, including Janus.

Janus has allocated $9 million related to investigations into its mutual fund trading but it also faces a number of civil lawsuits stemming from Spitzer’s complaint.

Shares of Janus were up 19 cents to $13.99 in midday trading Wednesday on the New York Stock Exchange, a day after the company said assets under management had grown 3.4 percent in October.

The amount of money managed fell 3.6 percent in September.

There were $149.8 billion in assets under management at the end of October, up from $144.9 billion a month earlier.