Janus Capital Group today announced it will restore $31.5 million related to losses that its funds or their shareholders incurred because of market timing trades that the firm allowed. The amount was determined by Ernst & Young, which was hired by legal counsel for the Janus Funds' independent trustees and doesn't reflect any agreement with regulators looking into Janus' operations, the company said. Janus also will adopt measures recommended by Ernst & Young to prevent future abuses, including boosting some fund redemption fees, changing portfolio valuation techniques to discourage market timing, and barring "soft-dollar" arrangements. The company said forgoing those soft dollar arrangements should boost expenses by roughly $9 million a year. Janus has not faced any legal action in connection with market-timing investigations.
Separately, Steve Scheid was named non-executive chairman of Janus Capital Group, effective Jan. 1. He is replacing Landon H. Rowland, whose term is expiring; Mr. Rowland will remain a director. Janus CEO Mark Whiston was scheduled to become chairman. Mr. Scheid was vice chairman of Charles Schwab Corp. and president of Schwab retail group from 2000 to 2002. He has been a Janus director since December 2002.