updated 3/26/2004 8:35:46 PM ET 2004-03-27T01:35:46

Mark Whiston, chief executive of Janus, appears to be under growing pressure to step down as the beleaguered fund company nears a settlement with regulators over the market timing scandal. 

Janus was one of the first companies named by Eliot Spitzer, the New York state attorney general, last September when he announced his investigation into the improper trading of fund shares. 

The company has avoided being charged by offering to settle the accusations, which center on it having struck deals to allow some short- term traders to market time its funds in exchange for gaining assets. A settlement is expected within two weeks. 

Ken Lane, a spokesman for the Colorado attorney general, said his office was "actively involved in talks with Janus. We were preparing to file charges against them last December, and they came to us and offered to settle, and we have been in discussions since."

Janus is also in discussions with the SEC and Mr. Spitzer's office. Regulators have stressed they will not demand the resignation of employees as a condition of settlement. 

However, it is believed they have told Janus that they are concerned about the level of knowledge and involvement of top management in market timing at the company. 

Geoff Bobroff, a fund consultant, said: "The issue we're facing is that regulators are wanting to show their toughness. At MFS, the top guys are gone. At Putnam, the top guys are gone. At Bank of America/Fleet, the top fund guys are gone." 

Those companies have already settled with regulators, although Putnam is still disputing the amount it should pay. 

Janus shares have dived almost 75 per cent from their high in 2000. The company was already suffering from outflows of money and a falling share price before the fund scandal broke, as its heavily growth-oriented funds fell from favor in the market downturn. 

The group, which has about $150 billion in assets, has had monthly outflows for almost four years now, which accelerated after the news of its involvement in market timing. 

Mr. Whiston took over as chief executive early last year.

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.


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