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Janus Capital Group is a mutual fund company that specializes in the active management of investor assets. ... As of February 29, 2004 total assets under management at Janus was $147.5 billion (Janus. ...
Tom Bailey established Janus Mutual Funds in 1970 with only 30 investors and less than $500,000 in initial capital. By 1980, Janus had accumulated $33. ... By 1990, the Janus family of funds had accumulated over $4 billion in assets and launched one of the first international funds in America, the Janus Worldwide fund. In 1996, Janus begins their first foray into national advertising and a year later become one of the first fund companies to offer a website for investors to research their funds. ... Also in 1998, Janus is named “Family of the Year” by Mutual Funds Magazine and Fortune ranks Janus as one of the top 100 companies to work for. By 2000, Janus was managing $250 billion and was the most revered fund company in America easily beating its peers in almost every investment category. In 2002 Janus shareholders were shocked to learn that Tom Bailey, the company’s founder, decided to sell his remaining ownership to Kansas City Southern, effectively relinquishing control of the company he founded. 2003 ushered in change for Janus as the company merged with Berger Funds and began trading on the New York Stock Exchange under the tick JNS (Janus. ...
Janus’ mission statement has always been to “get investors where they want to go. ... But investors may not be willing to believe that Janus has their best interests in mind because of some recent scandals that have rocked the mutual fund industry. ... For example, during the tech boom of the 1990’s the Janus Mercury Fund had nearly $16 billion dollars in total assets and was creating over $100 million in revenue in the year 2000 (Strategic Insight). ... With revenues drying up, Janus apparently tried to increase revenue by allowing Canary Capital to market-time certain funds and trade after-hours. The actions of Janus seem quite clear; when things get tough financially, cut corners to increase revenue.
In late 2003, Eliot Spitzer filed a complaint against Janus and Canary Capital Partners for allegedly engaging in late trading and market timing activities. These trading allowances let Canary Capital to make low-risk profits at the expense of individual shareholders. Janus internal memos suggest that Canary’s business could generate up to $50 million in additional profits for the fund company (SNL Financial). The complaint filed by Spitzer alleges that in the spring of 2002, Janus allowed Canary partners to engage in after hours trading of their funds. Because a number of companies report their earnings just after market close, Canary was able to make trades in Janus funds based on new information but at the old prices. When Janus allowed these trades to take place, they were diluting the returns of existing mutual fund shareholders. For example, if an earnings report about a major holding in a Janus fund announced spectacular earnings after market close, we would expect that stock to do well the following day.
Approximate Word count = 2564
Approximate Pages = 10.3
(250 words per page double spaced)
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