Waddell & Reed
, a Kansas City fund firm that settled with Eliot Spitzer
, has hired a new portfolio manager who also has a Spitzer history.
Just 22 months ago, Waddell reached a $77 million settlement with New York Attorney General, the SEC and the Kansas Securities Commissioner over market timing allegations, which it neither admitted nor denied. That settlement included $52 million of fines and $25 million of reduced fees.
Earlier, in August 2004, former Invesco chief investment officer Timothy J. Miller
settled SEC allegations that he facilitated market timing. As part of that settlement, Miller paid $150,000 in fines and and agreed to be barred from associating with an investment adviser for a year and from serving as an officer or director of an investment adviser or investment company for three years. That three year period ended last year.
Spitzer had filed a complaint in 2003 against Invesco Funds and its then-CEO, Raymond Cunningham
. Miller was not named as a defendant in the December 2003 complaint, but Spitzer had listed Miller as one of the senior Invesco executives "involved in developing the Special Situations policies and approving mutual fund timers pursuant to them."
Now with settlements completed and punishments paid, W&R and Miller are working together in what may soon be seen as the post-Spitzer era.
W&R has ended investment management purgatory for Miller by hiring him as as vice president and portfolio manager of the W&R Target Small Cap Value Portfolio
and the Ivy Small Cap Value Fund
Although regaining employability is a coup for Miller, his new position as a portfolio manager at W&R could be seen as a step down from his days as a CIO at a top twenty fund firm.
W&R's hiring of its own portfolio manager for the funds means that a subadvisor is losing its mandates. Since 2005 BlackRock
had acted as the subadvisor to both funds.
Miller's hire and the public announcement thereof, is a bold move for Waddell as it recently settled market timing charges against its firm in July of 2006
The announcement comes a few weeks after Spitzer himself was disgraced by allegations he patronized a high priced call girl ring.
Miller is not the only fund executive that had a brush with Spitzer to be rehired by the fund industry. John Abunassar
, a Bank One executive when Spitzer made his allegations against Canary Capital Partners, left the firm and was rehired a short time later by National City. He was hired as an executive vice president of the company's Institutional Asset Management business.
Abunassar was never formerly charged in the Spitzer investigation.
Company Press Release
Waddell & Reed
Financial, Inc. (NYSE: WDR) today announced that Timothy J. Miller, CFA,
has been named vice president and portfolio manager of the W&R Target Small
Cap Value Portfolio and the Ivy Small Cap Value Fund.
Miller, a 29-year veteran of the mutual fund and investment industry,
joined Waddell & Reed in February. Previously, he spent more than 10 years
with Invesco Funds Group, including four years as its chief investment
"Tim is a very experienced, talented portfolio manager and equity
strategist who adds depth to our investment management team," said Michael
Avery, chief investment officer for both Waddell & Reed Investment
Management Company and Ivy Investment Management Company. "We are pleased
and fortunate to be able to apply his talents to these funds."
While at Invesco, Miller oversaw the managers of more than 20 mutual
funds across most major asset classes. Prior to becoming CIO, he personally
managed a range of equity funds at Invesco, and spent five years as manager
of the company's Growth Fund Group. Prior to Invesco, he spent 13 years
with Mississippi Valley Advisors in St. Louis as Assistant Director of
Equity Research, and where he co-managed a small cap value fund.
Miller takes over management of the W&R Target and Ivy Small Cap Value
funds from Wayne Archambo, of BlackRock Capital Management. The funds had
been subadvised by BlackRock, and Mr. Archambo had been the portfolio
manager, since 2005.
"We sincerely thank Mr. Archambo and BlackRock for their partnership
and their stewardship of the Fund in recent years," said Avery. "This
change is a result of the opportunity we had to bring into our organization
someone with Tim's skills, and is not a reflection on BlackRock."
The Ivy Small Cap Value Fund was incepted in 1997 and had approximately
$150 million in assets at Dec. 31, 2007. The Ivy Funds offer a broad fund
lineup covering all major asset categories, including international and
domestic equity funds, specialty funds, fixed income funds and money market
funds. The Ivy Funds were named the second fastest growing fund family in
2007, among families with at least $5 billion in total assets under
management, according to Financial Research Corporation (FRC).
The W&R Target Small Cap Value Portfolio, also incepted in 1997, had
approximately $195 million at Dec. 31, 2007. The W&R Target Funds are
available only as investment options in variable annuity and variable life
contracts issues by life insurance companies. They are not offered directly
to the public.
Investors should consider the investment objectives, risks, charges and
expenses of a fund carefully before investing. For a prospectus containing
this and other information for any of the Waddell & Reed Advisors or Ivy
Funds, call your financial advisor or visit http://www.waddell.com or
http://www.ivyfunds.com. Please read the prospectus carefully before
About the Company
Waddell & Reed, Inc., founded in 1937, is one of the oldest mutual fund
complexes in the United States, having introduced the Waddell & Reed
Advisors Group of Mutual Funds in 1940. Today, we distribute our investment
products through the Waddell & Reed Advisors channel (our network of
financial advisors), our Wholesale channel (encompassing broker/dealer,
retirement, registered investment advisors as well as the activities of our
Legend subsidiary), and our Institutional channel (including defined
benefit plans, pension plans and endowments, as well as the activities of
ACF and our subadvisory partnership with Mackenzie in Canada).
Through its subsidiaries, Waddell & Reed Financial, Inc. provides
investment management and financial planning services to clients throughout
the United States. Waddell & Reed Investment Management Company serves as
investment advisor to the Waddell & Reed Advisors Group of Mutual Funds,
W&R Target Funds, Inc. and Waddell & Reed InvestEd Portfolios, Inc., while
Ivy Investment Management Company serves as investment advisor to Ivy
Funds, Inc. and the Ivy Funds portfolios. Waddell & Reed, Inc. serves as
principal underwriter and distributor to the Waddell & Reed Advisors Group
of Mutual Funds, W&R Target Funds, Inc. and Waddell & Reed InvestEd
Portfolios, Inc., while Ivy Funds Distributor, Inc. serves as principal
underwriter and distributor to Ivy Funds, Inc. and the Ivy Funds
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