Compliance January 5, 2011

AIG Participant Sues PwC over Audits

A former employee of American International Group Inc. filed a lawsuit claiming PricewaterhouseCoopers L.L.P. was negligent in its audits of AIG and failed to pursue a claim against the accountants.
Reported by

Reuters reports that Wanda Mimms brought the suit on behalf of the AIG Incentive Savings Plan against PwC and AIG’s board. Mimms contends the AIG incentive plan held shares in the company from late February 2008 through late January 2009, and PwC, as AIG’s auditor, should have known the share price was inflated by inaccurate financial statements.  

According to Reuters, the complaint says Mimms demanded in July 2010 that AIG’s investment committee pursue action against PwC for losses in the plan; her demand was referred to AIG’s board, which rejected it in September.  

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The lawsuit asks that PwC be ordered to make the incentive plan whole for its losses, as well as other relief.  

A PwC spokesman told Reuters the company has not been served and cannot comment at this time. An AIG spokesman declined to comment.  

The case is Mimms v. PricewaterhouseCoopers L.L.P. et al, U.S. District Court, Southern District of New York, No 11-00030.
Products January 5, 2011

WisdomTree Launches Managed Futures Strategy ETF

WisdomTree is introducing the WisdomTree Managed Futures Strategy Fund (WDTI).
Reported by

WDTI is an actively managed exchange-traded fund (ETF) that employs a quantitative, rules-based strategy designed to provide returns that correspond to the performance of the Diversified Trends Indicator. It is listed on the NYSE Arca with an expense ratio of 0.95%.   

According to a press release, the Diversified Trends Indicator or the DTI Index is a long/short rules-based, managed futures strategy developed by Alpha Financial Technologies (AFT) and its founder, Victor Sperandeo. The DTI Index began live calculation in 2004 and incorporates a diversified group of 24 liquid components of exchange-traded commodity and financial futures contracts.   

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The announcement said WDTI seeks to provide:  

  • Diversification through uncorrelated asset mix and a long/short strategy; 
  • Potential to profit from rising and falling markets; 
  • Potential to perform in inflationary and deflationary environments; and 
  • Exposure to commodities which are currently enjoying strong global demand.  

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