Alamo Rent-A-Car, thanks
I want to follow up with you on your Frontline article in the Oct. 1 issue regarding the efforts of John Krimmel and myself to return home. I want to report to you that Alamo Rent-A-Car did waive the drop-off charge that was referenced in that article. I can't imagine the unprecedented demand that was placed on Alamo and other rental car companies that day. Alamo not only waived the drop-off fee, but also waived the charge for the upgraded automobile.
Rather than trying to profit from the unfortunate events of Sept. 11, Alamo did in fact waive its customary charges that helped John Krimmel and I return home to our families and to our upcoming board meeting on a timely basis. I am grateful to Alamo for that.
Dan M. Slack
State Universities Retirement
System of Illinois
In a letter in the Oct. 15 Pensions & Investments, Patricia Doran Walters, designated officer, AIMR professional conduct program, and senior vice president, AIMR professional standards and advocacy, responds to my Oct. 1 letter to the editor. She informs us "in plain English," that (excepting herself, her staff and relevant professional conduct committee members), "no one, including any complainants, can or will be advised regarding the existence, status, or outcome of a professional conduct complaint, unless the matter results in a public sanction of an AIMR member." Her response is troubling on two counts.
First, Ms. Walters' statement on confidentiality is inaccurate. Rule 12, cited by Ms. Walters, provides clear exceptions to confidentiality: "The pendency, subject matter and status of proceedings ... may be disclosed if the alleged violation is a clear violation of law or regulations or if it caused or has the potential to cause serious harm to the investment management profession, the financial analysis community, and/or the general public."
One of the allegations I make in my open letter is that some portfolio insurance vendors violated securities law by advertising the strategy as a "guaranteed equity investment" and by not providing required risk disclosures. Such abusive marketing, which essentially portrayed the strategy as a free lunch, fueled a $100 billion fad in "insured" assets. On Oct. 19, 1987, the abrupt sale of equity and equity futures required by portfolio insurance programs converted a market correction into a crash larger than that of 1929. Thus, my allegations concern legal abuses that caused serious harm to investors and the public generally. AIMR can indeed comment openly if it wishes to.
Second, the broad issues I raise transcend the individuals concerned. Rather, they deal with the conduct of the FAJ and its oversight by the AIMR. For example, I question whether members of the FAJ editorial board who have vested financial interests in certain products or strategies should be allowed to review articles about those products or strategies; whether editorial board members should be allowed to influence the book review process; and whether the FAJ should publish statements that are clearly contradictory to securities law and AIMR's own standards. The answers to such questions, I submit, should not be cloaked by a policy of secrecy.
The level of confidentiality described by Ms. Walters may be appropriate to protect the reputations of individual AIMR members who are the subject of complaints. But when the same level of secrecy is applied to the manner in which and the rules by which the AIMR and FAJ, as organizations, conduct themselves, it cannot inspire confidence. It is like a police department that investigates itself, absolves itself and provides the public no reason for its conclusions. Here, as in so many areas of our business, transparency is a necessary adjunct of accountability.
The AIMR should clarify the standards that govern the FAJ and enforce them rigorously. This would assure members that it applies to FAJ editors, even those who are not AIMR members, the same code of ethics and standards of professional conduct that all members are required to follow. The objectivity of AIMR's premier publication, the FAJ, as well as AIMR's own integrity, are at stake.
Bruce I. Jacobs
member of AIMR
Florham Park, N.J.
Manulife big in DC market
Manulife Financial, as one of the major players in the defined contribution marketplace, regrets having not appeared in the Oct. 1 special report on defined contribution service providers. Unfortunately, because of a miscommunication with the organizers of the survey, none of our submitted data appeared in the P&I rankings.
Manulife has a strong presence in the defined contribution marketplace, particularly in the small 401(k) plan marketplace. We administer record keeping for 17,108 plan sponsors, of which 15,512 have fewer than 100 employees. Our U.S. defined contribution franchise totals $11.56 billion while we serve 787,337 participants.
These figures are current through June 30, and signify Manulife's continued dedication to leadership in the defined contribution industry.
chief strategy officer