When it comes to
Janus Capital Management
, no news is good news. But that wasn't the case on Wednesday.
In filing its quarterly report with the
Securities and Exchange Commission
, Janus acknowledged that the improper trading practices it is currently under investigation for seem to be a larger problem than it had initially claimed.
New York State Attorney General Eliot Spitzer and the SEC are currently investigating Janus along with a slew of other firms for market-timing -- a sketchy but not explicitly illegal trading maneuver that is essentially a form of arbitrage in illiquid or foreign securities.
Janus said in its SEC filing that the market-timing was more systemic than originally believed. Not only were there a dozen frequent-trading arrangements in its domestic fund business -- which, at their peak, accounted for 0.25% of total assets under management and resulted in $314 million in outflows when Janus ended the arrangements -- but there were several improper frequent-trading arrangements among large investors in the firm's offshore mutual fund business as well.
In addition, Janus said it received a request for information from the National Association of Securities Dealers (NASD) inquiring about agreements to distribute mutual fund company shares through broker/dealers.
Investors hungry for at least a morsel of good news can snack on the fact that -- despite losing some $1.6 billion in October -- overall assets for the month were up 3.4% from September. Janus reported total assets under management of $149.8 billion in October, up from 144.9 billion in September.