Janus Capital Group Inc. announced Tuesday that chief executive officer Mark Whiston is stepping down as the Denver fund company negotiates a settlement with regulators of allegations of trading abuses.
Steve Scheid, 50, is to succeed Mr. Whiston, 42, who had been named CEO in September 2002. Mr. Scheid was a vice chairman of Charles Schwab Corp. and had been Janus' chairman since January.
Analysts said that Mr. Whiston's departure should help the fund company, which manages $150 billion for clients, settle with New York State and federal regulators over its admission last December that it had allowed special short-term trading privileges to 10 investors from November 2001 at least until June 2003.
Janus was among the four fund companies named by New York Attorney General Eliot Spitzer in connection with the settlement he announced Sept. 3 with a hedge fund accused of trading abuses.
Elizabeth Rowe, an analyst at Find/SVP in New York, said the resignation of a senior executive is a good gesture but that Janus must show systemic change throughout the organization to satisfy regulators.
The company also will suffer a monetary penalty, analysts said, paying as much as $200 million to settle its case.
Mr. Whiston, who had worked at Janus for 14 years, knew about the short-term trading in Janus funds before the investigation became public in September. The company said that he had commissioned a study of trading by clients that was completed in November 2002.
