Compliance February 17, 2010

Law Firm Investigates Toyota for ERISA Violations Related to Gas Pedal Defect

The Law Offices of Howard G. Smith has announced its investigation of potential violations of the Employee Retirement Income Security Act violations by Toyota Motor Corporation, related to design defects in its vehicles' acceleration systems.
Reported by

A press release said a shareholder lawsuit pending in the United States District Court for the Central District of California claims that between August 4, 2009, and February 2, 2010, Toyota and certain of its officers and directors misrepresented and/or failed to disclose that there was a major design defect in Toyota’s acceleration system, which could cause unintended acceleration, thereby causing Toyota securities to trade at artificially inflated prices.

The law firm’s investigation concerns whether Toyota and other administrators of the company’s 401(k) plan failed to prudently and loyally manage the plan’s investments in Toyota stock by continuing to offer company stock when it was no longer a prudent investment for participants, according to the announcement.

Sudden acceleration in Toyota vehicles has been blamed for at least 34 fatalities, according to complaints filed with National Highway Transportation Safety Authority. News reports said the agency has received more than 2,000 complaints from Toyota owners about their cars lurching and speeding unintentionally.

The company has recalled 8.5 million vehicles to fix sticking pedals and adjust the braking software on hybrid cars. Safety regulators are investigating the timeliness of Toyota’s three recalls, and congressional representatives have called hearings on the handling of the recalls.

More information about the investigation is available at www.howardsmithlaw.com.

Products February 17, 2010

China Infrastructure ETF Launches

A new exchange-traded fund (ETF) that purports to be the first China Infrastructure ETF has launched.
Reported by

Emerging Global Shares (EG Shares), which describes itself as the “first dedicated emerging markets sector ETF provider”, has launched the China Infrastructure Index Exchange-Traded Fund (ticker: CHXX), an ETF focused solely on the infrastructure sector in China.  According to the announcement, the fund invests in 30 of the largest publicly traded companies dedicated to the infrastructure industry in that country, and is designed to track the performance of the INDXX China Infrastructure Index.      

“China has made enormous progress in their infrastructure development, but the country still has literally decades of infrastructure build-outs and ongoing maintenance ahead of them to keep pace with their economic and population expansion,” said Robert Holderith, President and CEO of EG Shares, in the announcement. “That, combined with research which shows that emerging markets should provide about 80 percent of the entire world’s growth over the next 10 years, makes the China Infrastructure ETF launch timely.”      

The China Infrastructure Index has an average market capitalization of $8.3 billion and the fund charges a net expense ratio of 0.85%* (gross expense ratio: 1.10%). The top five industry weightings of the index (as of 2/1/10), are:

  • Real Estate Management & Development (22.75%)
  • Metals & Mining (15.22%)
  • Construction & Engineering (14.93%)
  • Electrical Equipment (11.70%)
  • Construction Materials (9.37%).

The Emerging Global Shares China Infrastructure Index Fund is the fifth ETF to be introduced by Emerging Global Shares. Other funds include the:

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  • Emerging Global Shares Emerging Markets Metals & Mining Fund (EMT)
  • Emerging Global Shares Emerging Markets Energy Fund (EEO)
  • Emerging Global Shares Emerging Markets Financials Fund (EFN)
  • Emerging Global Shares Emerging Markets Titans Composite Index Fund (EEG).      
  • Emerging Global Advisors LLC is an independent investment advisory firm and the sponsor of the Emerging Global Shares family of ETFs.

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