Plus, ICI proposes reforms and more manager shuffling.
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Several former top executives at Merrill Lynch, including new AllianceBernstein CEO Peter Kraus, have been subpoenaed by New York attorney general Andrew Cuomo regarding huge payouts in 2008. Merrill Lynch paid out billions of dollars in bonuses at the end of 2008, even as the firm posted a massive fourth-quarter loss of $15.84 billion and prepared to be taken over by Bank of America
Merrill Lynch paid its top 10 executives a total of $209 million in cash and stock in 2008. Peter Kraus, who left Goldman Sachs to become head of strategy at Merrill Lynch in September 2008, received $29.4 million in cash and stock during his short three-month tenure, according to The Wall Street Journal. He left in December after being named CEO of AllianceBernstein, replacing the retiring Lew Sanders.
ICI Advocates Reform
The Investment Company Institute recently issued a research paper with suggestions for improving regulation of the faltering financial-services industry. The recommendations include creation of a new "Systematic Risk Regulator," or an agency designed to assess risks and promote market stability, as well as a "Capital Markets Regulator," which would broadly oversee the financial markets and set regulatory standards by melding the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The ICI has also been vocal in promoting 401(k) reform to improve retirement security for Americans. ICI president and CEO Paul Schott Stevens recently testified before Congress, calling for a more stable Social Security system and increased efficiency in 401(k) plans. His suggestions included creating simpler plans, enacting automatic enrollment, improving disclosure, and encouraging workers to invest in more than just company stock.
Firms continue to make changes to their manager ranks as cost-cutting pressure and poor performance persist.
Bob Corman is no longer manager of Neuberger Berman Focus
Managers continue to move through the revolving doors at Fidelity's Select lineup. Matthew Sabel is out at Fidelity Select Health Care