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Show BUSINESS E6 We day, M N.Y. charges ex-Bank ofAmerica broker he accused allegedly played SEC pursue what we believe to be = favorites on after-hours trades ‘het tec jem, On Sept. { and cost investors a fortune by my office and an effort Chere Mutual fund scandal: | he ECollege buys SLC’s Datamark for $72M a he said 3, Spitzer announced that iry Capital I ‘artners a multimillion ige fund, had agreed to pay $40 i million to settle By Mec Ricuat rges that it had im per trading arrangements with sev ral mutual fund companies, including Bank of America. Canary has admitted YOR: tate authorities i filed no wrongdoing and is ill Bank of Amer brok il ul vestigation illegedly \t the ul fund trad t of be | 3 ndered arra (; to York ral Eliot Spitz with the at center of the between Canary and Bank The allegationsinvolve “late in which investors are allowed buy and sell funds at that day’s prices ift close of markets, setting them up to profit on market-moving news that levelops after the markets close. Ordi Commission, which filed ivil charges alleging viola- nary investors who placed late ordersto buy the funds would have to pay the next rities law lawyer, lay’s Don Buchwald, did not immediately return a phone call. ive left at Sihpol’s home in } Conn., day's A closing price, also was not immediately the SEC” ished, mvicted Sihpol faces 8 to 25 losing out on that Louis Lanzano/ The Associated Press gains Our combined message is clear: Late trading is wrong, is clearly prohibited by turned I Spitzer “at the ta joint ind sihpol’s Canaan, trading,” n felony ind America. conference, if being elationship” if hpol Ul, news ised Sinpoi Lillions TRIBUNESTAFF AND Wire SERVICES cooperating with year and wrongdoers will be pun said Stephen Cutler, enforcement director for n prison the SE¢ I'he SEC pitzer said the charges were the first of several expected in the mutual fund probe he announced earlier this month Theodore Sihpol ill, center, is brought into Criminal Court on Tuesday in New York. Sihpol, a former Bank of America broker, faces from 8 to 24 years in prison on charges of grand larceny in connection with after-hours trading of mutual fund shares. America’s high-net worth group in New is seeking civil penalties, re overy of funds and possibly to ban Sihpol from the securities industry for life sihpol, who worked for Bank of York was fired last week along with several other employees who were asso ciated with the Morgan Stanley to pay $2M civil fine potentially fait ASSOCIATED PRESS steer into investors unsuitable firm's mutual fund business A Bank of America spokesmansaid the company is cooperating fully with investigators Regulators probe Putnamregarding possible improper market timing investments WASHINGTON Morgan Stanley is paying million fine to settle allegations that it held prohibited sales contests offering ticket Britney Spears concerts and the NBA final NASD rules are designed to prevent brokers from placing their interest in receiving lucrative to ewards over the investment needs of their cus tomers,’ said Mary Schapiro, the group’s vice push its brokers to sell in-house mutual funds and chairman and president of regulatory policy and ertain Puesday oversight. “NASD also requiresfirms to establish supervisory systems and procedures to achieve Phe ers annuities, regulators announced National Association of Securities (NASD), the brokerage I Deal- industi proper compliance. elf policing group, said Morgan Stanley had agreed to pay the civil fine and to be censured without allowed this misconduct to occur.’ I'he contests two national, 10 regional and admitting or denying wrongdoing I'he NASD also charged the Morgan Stanley’s failure to have any related systems or procedures in place 17 at the brokerage firm prizes branch-office level also offered as tickets to Rolling Stones concerts, tuition and the head of its retail sales division, Bruce Alonso, with failure to properly supervise for an auto racing school and all-expense-paid trips to resorts Alonso, who allegedly led the sales promotion of the firm's own mutual funds, agreed to be cen Pressure to sell apparently was intense and widespread. The NASD said its investigation ured and to pay 4 $250,000 civil fine Ne W York-based Morgan Stanley and Alonso couldn't immediately be reached for comment found that national managers at Morgan Stanley pressured regional managers to meet sales goals, and regional managers, in turn, pressured le AssociateD PRESS BOSTON State securities officials were probing possible improper market timingat one of Putnam Investments’ inter national funds Secretary of State William Galvin said Monday subpoenas were issued Thursday, regard ing trades at the firm’s Inter national Capital Opportunities Fund between January and September 2000 “This is not a fishing expe dition,” said Galvin, whose of fice oversees the state’s securi through December 2002, according to the NASD cused Morgan Stanley of “contempt” for its cus ties division. “We obviously have probable cause of some kind to make these inquiries.” Nancy Fisher, a spokeswoman for Boston-based Putnam, said the company had “received an inquiry from the state of Mas Ihe contests violated NASD rules because they favored Morgan Stanley's own mutual fund thereby encouraging brokers to tomers by pushing the company’s mutual funds through crude sales contests and other internal promotions sachusetts and are responding.” The probe follows a similar branch managers to meet the goals. The prohib ited sales contests were the result, it said Morgan Stanley ran 29 internal sales contest enticing brokers and managers with more than $1] million in noncash prizes, from October 1999 Last month, Massachusetts authorities ac investigation into market tim ing at Prudential Securities ‘Inc.'s Boston office. involves Market timing short-term, “in and out” trading of mutual fund shares, which harms the long-term shareholders for whom mutual funds are designed. The prac tice is not illegal, but is often prohibited byfunds. In its prospectus for the in ternational fund, previously called the International Voyager Fund, Putnam says shares held for less than 90 days would be charged a 1 percent redemption fee. It also warns that it retains the right t ) limit ex changes in and out ofthe fund, Putnam said it was one of the first companies to use a practice called “fair value pric: ing,” which updates the value of foreign stock in order toprevent market timers from mak ing profits across time zones. | | | | | ECollege.com inc., whose software and services are used by colleges and universities to provide online learning, agreed to buy Datamark Inc. for about $72 million in cash, debt and stock. ECollege will use about $58 million in cash, $12 million in debt and 150,000 shares to buy the stock of Salt Lake City-based Datamark from Leeds Weld & Co., a private equity firm, ECollege said. Datamark providesrecruitment, enrollment and retention services to postsecondary schools. The purchase will add to ECollege’s earnings and more than double its revenue in 2004, the company said. Datamark’s headquarters will remainin Salt LakeCity and nojobs willbe cut, Denver-based ECollege said. “The proprietary _postsecondary market has been a great performer and Datamark and ECollege are companies that participate in that sector,” Jeffrey Leeds, principal and founderof Leeds Weld, said in an interview. “Thekeyis to bea solutions provider, not a services provider.” The firm earned back about eight times its original investment on Datamark in three years, Leeds said. Shares of ECollege rose $4.67, or 32 percent, to close at $19.35 Tuesday in Nasdaq Stock Mar ket trading. They have risen more than fivefold this year Former Massachusetts Gov, William Weld is a partner at Leeds, and former New York City Mayor Rudolph Giuliani is its advisory board chairman Leeds wasfounded in 1993. Counting Datamark, the firm has shed stakes in three companies this year, including the sale of Edison Schools Inc., which runs public schools under con tract, to management; and Ross University, a Caribbean medical school, to DeVryInc. ‘ ™ ys ih Hil tA * at! : t wai +) FOOD & DRUG STORES < atiia Y] | ris apieonan f oe a gen thal P. 0 2) 2, ae ee & a Use the $1.00 off 2 mfg. Coupon $9/1 4-2 $1.17 - ; : Ge citetpt ‘ A - 4 2 3299) FOR : ' << ; i |00z. Cheerios, sale priced $1.67. — 7 ee eeeEeE. 20.040z. Frosted Mini Wheats, FOOD & DRUG STORES Usethe $1.00 off mfg. CouponV9/1 4-16 $1.50 — Meal Cost $5.34 if . (e f f 0 - €f BGs Bi? sale priced $2.50. i ee and Cookles Use the $1.00 off 2 mfg. | -eoe eee Crackers . Meal! Cost es fl. ; : FOOD & DRUG STORES - {Ot - for about $5.00. just add milk. £ Kroger |AcO*", Breakfast for 5 days to feed a family of 5 |9oz. 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