Market timing: Bad timing
Monday, November 17th 2003, 11:17PM
You have to feel for BT considering all the things it has been through in the past few years.
Besides having about as many owners as a dodgy used car (which of course it isn't), the business has had to endure many people changes - particularly in Australia. It’s also had the imbroglio with the Securities Commission over the exemption notice problems and now its star international share manager Putnum gets itself into major problems with United States regulators over the issue of "market timing."
(Like some of the other events BT’s not alone with the market timing one in New Zealand – it just gets the most attention).
Luckily the market timing issue hasn’t got much traction in the mainstream media – except for a piece on a website which suggested that market timing is “the greatest scandal in the history of the mutual fund industry” and that it “has sent the American saving market reeling.”
“This provides new evidence that the culture in the industry needs fundamental remedial behaviour modification. Managers ignore clear rules when profitable opportunities arise,” the columnist suggested.
I’m not sure you could say this about the New Zealand industry – however the story provides a salient lesson that people in this business have to be absolutely squeaky clean.
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