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  • Jul 31st, 2004
  • Comments Off on Janus client to withdraw $5 billion, stock drops
Janus Capital Group Inc, which in April settled regulatory probes of improper mutual fund trading, said on Friday a client intends to withdraw $5 billion from its funds by year end, or 3.7 percent of Janus' total assets under management. Shares of Denver-based Janus tumbled as much as 7.6 percent to a 15-month low shortly after opening on the New York Stock Exchange, before paring some of those losses.

The company also said Lars Soderberg, its executive vice president of institutional services, had resigned, after taking a leave of absence. Soderberg, who has not been charged with wrongdoing, will receive $1.5 million in cash and $1 million in deferred compensation, according to a July 21 separation agreement.

Spokesman Steve Belgrad declined to identify the client withdrawing the assets, or the funds in which those assets were invested. The client's board of directors is expected to decide in early August whether to fire Janus.

The developments were disclosed in Janus' quarterly report filed with the US Securities and Exchange Commission.

They represent the latest setback for Janus, which agreed in April to pay $226 million to settle charges it allowed favoured clients to trade mutual funds rapidly, known as market timing, at the expense of ordinary investors.

Janus was one of the first four fund companies named last September by New York Attorney General Eliot Spitzer in his probe of mutual fund companies.

Janus ended June with $135.4 billion of assets under management, down 55 percent from $303.7 billion four years earlier, securities filings show.

Many of its funds performed well in the 1990s, but were hit hard by the subsequent three-year bear market in stocks as their growth-oriented investment style fell from favour.

Soderberg's replacement is John Zimmerman, who on June 1 was named Janus's senior vice president of institutional services, overseeing separate accounts and institutional money market funds.

Copyright Reuters, 2004


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