Finance, Accounting and Control Case Study

Janus Capital Group: The Revival of the American Mutual Fund Company

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Abstract:
With the revelation of the mutual fund scandal in the US in 2003, Janus Capital Group, a major player who had half of the US total investments in growth funds, was hit hard with huge fund outflows. Moreover, Janus was also charged with unethical and illegal trade practices. Although it spent $226 million to settle the charges, investors had lost their faith in the company. To rebuild its brand image, the leadership of the company was handed over to Steven L. Scheid and Gary Black, two veterans from the financial services industry.

Pedagogical Objectives:

To discuss the strategies adopted by Janus Capital Group to win back investor confidence in the backdrop of the mutual fund scandal in the US.

Keywords : Mutual fund industry in the US; Mutual fund scandal in the US; Janus Capital Group; Market timing; Late trading; Canary Capital; Mutual Fund Reform Act; Stilwell Financial; Morningstar ratings; Restructuring / Turnaround Strategies Case Study; Winning investor confidence in mutual funds; No load funds; Growth of mutual funds in the US; Investment Companies Act of the US