Compliance September 15, 2009

Retirement Plan Assets Used to Pay for Drugs

U.S. District Judge Deborah K. Chasanow has sentenced Alan Neal Mates of Weston, Florida, to a year and a day in prison followed by three years of supervised release for conspiracy to commit money laundering.

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United States Attorney for the District of Maryland Rod J. Rosenstein announced that, according to his guilty plea and testimony at court proceedings, beginning in at least 1999, Mates agreed to act as an intermediary between Christopher Denison, who lived in Maryland and wanted to illegally purchase oxycodone and valium, among other controlled substances, and a person who lived in Florida who would provide the drugs. Specifically, Mates agreed to accept the drugs that the supplier would mail to him and send them to Denison, and received cash from Denison to pay for the drugs and Mates services.

According to the announcement, initially, Denison sent personal funds to pay for the drugs, but as he ran out of money, he devised a scheme to divert funds from his employer’s retirement plan to pay for the drugs. Denison, who was manager of the retirement plans for the company, identified members of the retirement plan whose plan statements were returned as undeliverable and changed their dates of service to ensure they would appear to be vested in the plan and entitled to distribution of retirement income.

He then changed the members’ name and mailing address in the company’s computer system to names and addresses provided by Mates, including his mother and an employee, and sent them checks for distributions from the retirement accounts. Mates laundered more than $200,000 over the course of the conspiracy.

The announcement said Denison pleaded guilty to theft from an employee benefit plan and was sentenced to four months in jail, followed by six months of home detention.

Products September 14, 2009

S&P Beefs up Adviser Target-Fund Research

Standard & Poor’s Equity Research Services has upgraded its open-end mutual fund research product for financial advisers with bottom-up research about a fund’s holdings.

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A news report said each entry also includes a performance, risk, and cost analysis and then ranks more than 20,000 mutual funds on a 1 to 5 (highest) scale. The new data is available on the S&P’s MarketScope Advisor platform.

S&P said it brings to the analysis tools such S&P STARS research, S&P Credit Ratings, S&P Fair Value, and S&P Quality Ranks.

S&P ranks mutual funds by decile within their S&P Asset Category and provides detailed peer comparisons throughout the fund reports. A fund’s ranking and pricing data are refreshed every week, reflecting its performance for the period as well as changes to S&P’s assessment of individual components as of the close of trading on the prior Friday, the news release said.

“We believe that past performance should be the beginning of the search for a mutual fund – and not the end,” said Todd Rosenbluth, Director at Standard & Poor’s Equity Research Services. “By conducting proprietary holdings-based analysis and factoring in various performance, risk and cost components, the Standard & Poor’s Mutual Fund Rankings provides insight into how a fund is positioned, rather than solely looking at the past.”

More information about S&P equity research is available at www.equityresearch.standardandpoors.com.

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