Janus Capital Group Inc. said Friday it will pay back $31.5 million gained from questionable mutual fund trading arrangements that have led to investigations by state and federal regulators. Janus said it had not determined whether the money will be placed in funds affected by market timing, a strategy under which investors make quick in-and-out trades, or whether it will be given directly to shareholders. Market timing isn’t illegal, but many mutual fund managers say they don’t allow it because it can hurt profits for long-term shareholders.
Wal-Mart Stores Inc. says it had been actively cooperating with federal investigators for three years when agents surprised the world’s largest retailer with a raid that rounded up about 250 alleged illegal cleaning workers at Wal-Mart stores in 21 states. Wal-Mart, known as a cost-cutter, said Friday it slowed a money-saving plan to move its floor cleaning in-house so it could better help the government investigate the use of alleged illegal workers by janitorial contractors. The retailer also said it is the target of a federal grand jury investigation in Pennsylvania.
Merrill Lynch’s former chief energy trader admitted stealing $43 million from the firm Friday in a plea deal under which he also accused superiors of directing him to make the company’s energy business seem more profitable than it was. Daniel Gordon, 27, of Old Lyme, Conn., pleaded guilty to wire fraud, money laundering and conspiracy in U.S. District Court in Manhattan. Gordon promised to testify against others, if necessary, as part of a continuing probe. Sentencing was set for April 30. Gordon was released on $500,000 bail. Merrill Lynch spokesman Mark Herr said the company was cooperating fully with the government and had not heard Gordon make allegations that other employees had assisted him in inflating the value of the company’s energy business.
More than 1.2 million low-income Americans, including 500,000 children, have lost health coverage as a result of state cutbacks in programs for the poor, according to a new study by a Washington, D.C., think tank. Thirty-four states have cut health insurance programs for the poor and children because of deep budget deficits over the past two years, the Center on Budget and Policy Priorities said. Further cuts are likely next year, when a temporary federal government increase in its share of Medicaid expires, the group said.
From Herald news services
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