Cross Trading and the Cost of Conflicts of Interest of Mutual Fund Advisers

2012 ◽  
Author(s):  
Lorenzo Casavecchia ◽  
Ashish Tiwari
2018 ◽  
Vol 19 (2) ◽  
pp. 16-18
Author(s):  
Elaine Greenberg

Purpose This paper aims to explain the U.S. Securities and Exchange Commission’s (SEC’s) recent Share Class Selection Disclosure (SCSD) Initiative, which offers potentially favorable settlement terms to investment advisers who self-report to the SEC’s Enforcement Division violations of the federal securities laws relating to certain mutual fund share class selection issues and to discuss factors for consideration by investment advisers regarding their possible participation in this initiative. Design/methodology/approach This paper discusses the conditions and terms of the SEC’s SCSD Initiative, the SEC’s focus on conflicts of interest associated with mutual fund share class selection, the applicable law, the complex nature of these issues and the factors that investment advisers should consider in determining whether to participate in the initiative. Findings The assessment of the facts and the evaluation and analysis of the issues may be both time-consuming and complex. Firms need to carefully consider whether the potential benefits of self-reporting outweigh any possible downsides, including the potential collateral consequences that an SEC enforcement action may have on their business operations. Originality/value This paper contains valuable information about a recent SEC Enforcement Initiative and provides practical guidance from experienced securities counsel.


2021 ◽  
Author(s):  
Zhi Jin ◽  
Bingxuan Lin ◽  
Chen-Miao Lin

Financial analysts have two important roles in the capital market. In addition to their informational role, which has been widely studied, they play an important monitoring role. Similar to their informational role, their monitoring role might be negatively affected when they face conflicts of interest. Using a sample of Chinese firms, we show that if analysts are under pressure (i.e., housed in a brokerage firm where specific mutual funds hold large positions in a company covered by the analyst), their role in lowering the firm earnings management activities is significantly compromised. We find that the closer the business relationship between the mutual fund and the brokerage firm, the greater the firm earnings management. Our findings caution investors and regulators to heed the impact of client pressure on analysts' roles in financial markets.


1995 ◽  
Vol 349 (1330) ◽  
pp. 337-344 ◽  

In a model, conflicts of interest between communicating individuals are shown to have an important influence on the cost and form of signals that evolve. Two types of conflict are considered: competition between senders to obtain a response from the receiver, and conflict between the sender and the receiver. The receiver system is modelled as an artificial neural network whose ‘resistance’ to signals is represented as a motivational factor that varies independently of the signal. Biases in the receiver system act as the selective force on signals, causing them to become more costly and conspicuous as the intensity of conflict increases. There is some evidence that competition between senders and sender—receiver conflict may have qualitatively different outcomes. We give examples of some situations to which the model might be applied and point out some predictions that could be tested empirically.


2010 ◽  
Vol 19 (4) ◽  
pp. 333-347 ◽  
Author(s):  
John Read ◽  
Richard Bentall

SUMMARYAim – To review the literature on the efficacy of electroconvulsive therapy [ECT], with a particular focus on depression, its primary target group. Methods – PsycINFO, Medline, previous reviews and meta-analyses were searched in an attempt to identify all studies comparing ECT with simulated-ECT [SECT]. Results – These placebo controlled studies show minimal support for effectiveness with either depression or ‘schizophrenia’ during the course of treatment (i.e. only for some patients, on some measures, sometimes perceived only by psychiatrists but not by other raters), and no evidence, for either diagnostic group, of any benefits beyond the treatment period. There are no placebo-controlled studies evaluating the hypothesis that ECT prevents suicide, and no robust evidence from other kinds of studies to support the hypothesis. Conclusions – Given the strong evidence (summarised here) of persistent and, for some, permanent brain dysfunction, primarily evidenced in the form of retrograde and anterograde amnesia, and the evidence of a slight but significant increased risk of death, the cost-benefit analysis for ECT is so poor that its use cannot be scientifically justified.Declaration of Interest: Neither author has any financial conflicts of interest in relation to this paper.


Blood ◽  
2021 ◽  
Vol 138 (Supplement 1) ◽  
pp. 4962-4962
Author(s):  
Jacob D. Bitran ◽  
Edward Nabrinsky ◽  
Shams Bufalino ◽  
Phillip Knouse ◽  
Angel G. Galvez

Abstract Adult, Philadelphia chromosome-positive, Acute Lymphoblastic Leukemia (Ph-positive ALL) had a poor prognosis, but with the use of an initial BCR/ABL tyrosine kinase inhibitor such as Dasatinib in conjunction with chemotherapy such as hyper-CVAD, the projected 24 month disease free survival is 64%. More recently Foa et al. on behalf of the GIMEMA investigators published a phase II trial of Dasatinib and Blinatumomab as initial therapy for adults with ALL. The complete remission rate was 98%, and the projected disease-free survival at 24 months is 88%. We wished to analyze the incremental cost-effectiveness ratio (ICER) of the Dasatinib and Blinatumomab therapy as compared to Dasatinib and hyper-CVAD. The comparison is based on retail costs of chemotherapy for Dasatinib, Blinatumomab and hyperCVAD and excluded hospital and outpatient charges. The cost of hyperCVAD is based on treatment of a person with a BSA I.8m2. The retail cost of therapy is shown below. Drug Dose Cost Dasatinib 100 mg $505.67 Blinatumomab 1 mg $126.81 Cyclophosphamide 1,000 mg $231.00 Mesna 1,000 mg $42.89 Vincristine 2 mg $18.52 Dexamethasone 40 mg $4.12 Cytarabine 100 mg $22.88 Leucovorin 25 mg $7.48 The ICER formula is the cost of new therapy minus (-) the cost of standard therapy/quality of adjusted life new therapy - the quality of adjusted life standard (QALY). The yearly cost of Hyper-CVAD and Dasatinib is $147,288.48 per QALY, whereas, the yearly cost of Dasatinib-Blinatumomab is $187,940.46 per QALY. The difference is $42,451.98 which is less than the 50,000-threshold using cost-effective analysis. In conclusion, the combination of Dasatinib-Blinatumomab appears to be cost effective. Disclosures No relevant conflicts of interest to declare.


Blood ◽  
2014 ◽  
Vol 124 (21) ◽  
pp. 848-848 ◽  
Author(s):  
Salma Afifi ◽  
Nelly G. Adel ◽  
Elaine Duck ◽  
Sean M. Devlin ◽  
Heather Landau ◽  
...  

Abstract Background: Cyclophosphamide plus G-CSF (C+G-CSF) is the most widely used stem cell (SC) mobilization regimen in multiple myeloma (MM) patients. Plerixafor plus G-CSF (P+G-CSF) has demonstrated superior SC mobilization efficacy when compared to G-CSF alone in phase II and III studies and has been shown to rescue patients who fail mobilization with G-CSF with or without cyclophosphamide. Despite the proven efficacy of P+G-CSF in upfront SC mobilization, its use for this indication has been limited, mostly due to concerns of high cost of the drug. Investigators have proposed "on demand" use of plerixafor in patients identified to have inadequate SC mobilization with G-CSF with or without cyclophosphamide, with the assumption that such an approach promotes cost containment by limiting plerixafor use. However, a comprehensive comparison of the cost effectiveness of SC mobilization using C+G-CSF versus P+G-CSF has not been performed. The goal of this retrospective study was to conduct a cost analysis between these two approaches. Methods: Using the pharmacy database, we identified all MM patients treated at Memorial Sloan Kettering Cancer Center between 11/2008 and 6/2012 who received C+G-CSF or P+G-CSF for upfront SC mobilization. Patients collecting <5 x 106 CD34+ cells/kg were considered mobilization failures and had a second attempt at SC mobilization using an alternative approach. For salvage mobilization, patients received P+G-CSF after failing C+G-CSF-based mobilization or were re-mobilized with C+G-CSF along with plerixafor after failing upfront P+G-CSF mobilization. Mobilization costs included in the analysis were those associated with upfront mobilization, those associated with salvage mobilization in patients failing an initial mobilization, and those associated with complications directly related to the mobilization procedures. Cost calculations included the following: cost of cyclophosphamide 3000 mg/m2, plerixafor 0.24 mg/kg, and G-CSF 10 mcg/kg and their administration prior to and during pheresis sessions; pheresis sessions; laboratory tests on pheresis days; re-hospitalization occurring within 15 days of either mobilization approach and considered directly related to the mobilization procedure. All costs were calculated using the institution’s ratio of cost to charges, and were normalized and adjusted based on institutional charges and costs for 2012. Results: A total of 223 patients undergoing upfront mobilization were identified, with 111 patients receiving C+G-CSF, and 112 patients receiving P+G-CSF. Thirteen patients (12%) were re-hospitalized due to C+G-CSF-related complications, with an average hospital stay of 6.5 days. No patients in the P+G-CSF arm were hospitalized. Nineteen patients (17%) in the C+G-CSF group failed first mobilization and received P+G-CSF as salvage regimen, with four (3.6%) failing salvage collection and ultimately deemed collection failures. Seven patients (6.2%) in the P+G-CSF group failed upfront mobilization and received C+G-CSF along with plerixafor as salvage regimen, with two (1.8%) subsequently failing salvage mobilization. The average number of pheresis sessions performed was 3.29 and 2.42 in the C+G-CSF and P+G-CSF upfront groups, respectively (p=0.373). In total, the average cost of stem cell collection per patient was 1.3 times greater in the C+G-CSF group than in the P+GCSF upfront group (p=0.017). When the costs associated with salvage pheresis are discounted for the 19 patients in the C+G-CSF upfront group who failed first SC mobilization, assuming that these patients could have been salvaged by plerixafor-on-demand, the cost per patient in the C+G-CSF group remains 1.26 times greater (p=0.019) than that of the P+G-CSF group. Conclusion: The use of P+G-CSF upfront for SC mobilization is more cost effective than the more widely used approach employing C+G-CSF. This difference is likely due to several factors including: 1) higher rate of hospitalization in the C+G-CSF group due to expected complications such as febrile neutropenia and catheter-related infections; 2) higher rate of mobilization failure leading to increased need for salvage mobilization in the C+G-CSF group; 3) reduced G-CSF use in the upfront P+G-CSF group. Overall, this single institution study provides additional rationale for the standard use of P+G-CSF as upfront mobilization regimen in MM patients. Disclosures No relevant conflicts of interest to declare.


2020 ◽  
Vol 30 (56) ◽  
pp. 53-77
Author(s):  
Carmen Pilar Martí Ballester

The purpose of this paper is to compare the performance of mutual funds —pension plans— whose managers simultaneously manage the assets belonging to pension plans —mutual funds— with that achieved by mutual funds —pension plans— whose managers only manage the assets belonging to mutual funds —pension plans—. To do this, we present a sample consisting of data corresponding to 115 Spanish equity pension plans and 336 Spanish equity mutual funds in relation to such aspects as risk-adjusted return, management and custodial fees, asset size, creation date, number of participants, name of the asset management companies for the period between February 2007 and June 2011. On this data, we propose a model using the bootstrap technique. The results obtained show no significant relationship between side-by-side management and financial performance in the mutual fund and pension plan industries. Therefore, we do not find evidence that pension plan investors are being exploited.


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