Plus, Fidelity Asia managers fired, tax-exempt munis under fire, and more.
The Supreme Court has rebuffed bond giant PIMCO, allowing a $600 million class-action lawsuit to proceed. In doing so, the court affirmed an earlier ruling by Judge Richard A. Posner of the Seventh U.S. Circuit Court of Appeals. The lawsuit, filed by Richard Hershey and Breakwater Trading LLC in 2005, alleges that PIMCO manipulated the price of 10-year Treasury notes on the Chicago Board of Trade.
Fidelity Asia Managers Fired and Another One Replaced
Following an investigation into a breach of the firm's code of ethics, Fidelity fired Wilson Wong and Kevin Chang, former managers of Fidelity China Region
The firm indicated that the ethics breach had no negative impact on its clients' funds, though the Financial Times reported that Wong and Chang's use of personal trading accounts sparked the investigation.
Wong did a reasonable job on Fidelity China Region throughout the roller-coaster ride that followed his 2007 start. That said, fundholders had to endure three manager changes, excluding Tse's recent return, since January 2005. Chang's five-plus-year record on Fidelity Advisor Emerging Asia was more impressive and bested most Pacific/Asia ex-Japan funds during that time frame.
The good news for Fidelity China Region fundholders is that Tse is one of the more experienced Asian equity managers. Chickles has less experience running funds. He ran Fidelity Series Emerging Markets fund from January 2008 through August 2009, and in October 2009, he replaced Jess Tan on Fidelity Southeast Asia
Separately, Fidelity announced that as of March 8, Chris Sharpe (comanager of the Fidelity Freedom funds) and Geoff Stein (manager of the Fidelity Asset Manager funds) will take over Fidelity Advisor Dynamic Capital Appreciation
Goodbye to Tax-Exempt Bonds?
The Bond Buyer reported last week on legislation proposed by Senators Ron Wyden, D-Ore., and Judd Gregg, R-N.H., that would do away with tax-exempt bonds. The bill also would turn state and local bonds' tax exemption into a tax credit and eliminate advance refunding. Wyden was the original sponsor of the legislation that led to the Build America bonds.
First Eagle Appoints New CEO
This week, First Eagle Investment Management named Bridget A. Macaskill president and chief executive officer. John Arnhold is now chief investment officer and remains chairman. Macaskill, who has been at First Eagle for a little more than a year, earlier served as CEO of Oppenheimer Funds. She is currently a trustee and on the investment committee for the TIAA-CREF funds.