Janus reaches $225M settlement in case of improper trading

DENVER (AP) -- Janus Capital Group is paying more than $225 million as part of a multimillion-dollar settlement reached nine months after regulators accused the mutual funds giant of improper trading practices.
The agreement announced Tuesday prompted Janus to take a $59 million charge, which led the Denver-based mutual fund giant to a quarterly loss.
Under the $225 million agreement announced Tuesday, Janus also will reduce the fees it charges investors by $125 million over five years.
The company now faces the difficult task of rebuilding credibility, analysts said.
"The brand has been so tarnished by being involved in this," Morningstar analyst Rachel Barnard said. "It's going to be a rebuilding year."
Janus spokeswoman Shelley Peterson said company officials are confident they're up to the task. "This [settlement] is a huge step forward for the firm," she said.
The agreement is the latest deal to emerge from the scandal sweeping the $7 trillion mutual funds industry.
Janus was under investigation for market timing -- a type of rapid, in-and-out trading that can skim profits from long-term fund shareholders.
Regulators accused Janus of entering into agreements with select investors that permitted them to engage in market timing while diluting the returns of other shareholders. The practice is legal, but Janus policies discouraged it.
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