Compliance June 26, 2008

Law Firm Continues Probes of Fiduciary Breaches

The law firm of Stember Feinstein Doyle&Payne, LLC , has turned its watchful eye to possible fiduciary misconduct at Fifth Third.
Reported by

The law firm is investigating conduct causing losses to the Fifth Third Bancorp Master Profit Sharing Plan, the company’s 401(k) plan, which may have violated the Employee Retirement Income Security Act (ERISA).

The firm is probing whether certain fiduciaries of the plan knew or should have known that Fifth Third was not properly and timely disclosing its loan losses, which has caused losses to the company’s common stock.

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Specifically, a release said, Stember Feinstein is investigating whether Fifth Third breached its fiduciary obligations by continuing to offer Fifth Third common stock as an investment option for participant contributions when it was imprudent to do so, and by failing to take action to sell Fifth Third stock or otherwise protect the plan assets in light of the deteriorating stock value.

In March, the firm announced an investigation into possible fiduciary breaches to the Bear Stearns Companies Inc. Employee Stock Ownership Plan, Profit Sharing Plan, and Deferred Compensation Plan (see Bear’s Ills Draw Company Stock “Investigation”). Since then, the law firm has announced similar investigations into plans sponsored by Wachovia (see Wachovia 401(k) Plan Under Investigation) and Marshall & Ilsley (see Law Firm Investigates Possible M&I Fiduciary Breach to Retirement Plan).

Products June 26, 2008

Vanguard Announces First Index Global Fund

The Vanguard Group launched a fund that seeks to track the investment performance of the FTSE All-World Index, a benchmark of approximately 2,900 stocks in 47 countries.
Reported by

A Vanguard release about the new Vanguard Total World Stock Index Fund said its institutional share classes assess a 0.25% purchase fee to help defray the transaction costs associated with buying foreign securities and a 2% redemption fee on shares sold within two months of purchase.

The fund’s share classes include ETF shares (ticker: VT) featuring an estimated expense ratio of 0.25%, as well as institutional shares (ticker: VTWIX), which have the lower estimated expense ratio at 0.20%. A $5 million minimum initial investment is required.

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The FTSE All-World Index is a market-capitalization-weighted index designed to measure the performance of large- and mid-capitalization stocks worldwide. Stocks of companies domiciled in developed and emerging international markets represent approximately 59% of the index; the remaining 41% are U.S. stocks, according to the release.

“Vanguard Total World Stock Index Fund is our first passively managed global fund and provides exposure to the world’s stock markets through a single, low-cost vehicle,” said Vanguard Chief Investment Officer Gus Sauter, in the release. “We view the new offering as an ideal “foundation fund’ for a well-diversified investment portfolio.”

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