SEC requests Bankoh papers

By Deborah Adamson
Advertiser Staff Writer

The Securities and Exchange Commission has requested information about the money management activities of the Bank of Hawaii's mutual fund division, the bank said yesterday.

Bill Henry, executive vice president of Bankoh's investment services group, said the federal regulator asked for and received information in September about Pacific Capital Funds. He said Bankoh was one of 100 firms asked for information.

"We're not sure what the SEC is going to do with the information," Henry said. "The bank is very concerned, as are investors and clients, about developments in the mutual fund industry."

Bankoh said the request is related to the ongoing SEC investigations of the mutual fund industry.

Several mutual fund companies have been under investigation for improper market timing or illegal trading that benefited certain investors at the expense of others.

The growing list includes Putnam Investments, Prudential, Janus, Strong Capital, Bank of America, Bank One, Alliance Capital, Alger Management, Federated Investors and Pilgrim Baxter. Putnam settled some charges yesterday with the SEC but still faces a probe by Massachusetts regulators.

Bankoh said that the SEC sought information on the pricing of securities at Pacific Capital, which is one way to check on possible market timing activities.

The federal regulator also wanted copies of fund prospectuses and supplemental information.

Henry said Pacific Capital did not engage in market timing or late trading. To discourage market timers, the bank put in place a 2 percent redemption fee in January that investors have to pay if they exit a fund within 90 days, he said.

Reach Deborah Adamson at dadamson@honoluluadvertiser.com or 525-8088.