updated 7/29/2004 6:24:40 PM ET 2004-07-29T22:24:40

Janus Capital Group Inc. said Thursday that one of its clients plans to pull approximately $5 billion out of its mutual funds by the end of the year, a sum that represents 3.7 percent of the group's total assets under management.

The announcement is the latest blow for Janus, which agreed three months ago to a $225 million-plus settlement with federal and state regulators to resolve claims it allowed improper mutual fund trading.

Janus did not identify the client, or say why the decision was made.

"We're disappointed when any client comes to this conclusion, especially given our improved performance and the steps we've taken to put our fund holders first," CEO Steve Scheid said in a prepared statement.

Janus' assets under management dipped 0.3 percent in June to $135.4 billion, the latest figure available. Investors withdrew about $1.4 billion in June after a 7.2 percent drop in May.

In April, the Denver-based company reached a $225 million-plus settlement with state and federal regulators to resolve allegations it allowed market timing, a type of rapid, in-and-out trading that can skim profits from long-term fund shareholders.

The practice is legal, but Janus policies discouraged it. Janus acknowledged 10 market timing arrangements, all of which have been ended. Janus has also undertaken a series of reforms designed to protect fund shareholders.

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