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Up Front News

Haaga Becomes ICI Chairman, Replacing Two-Term Glenn

The Investment Company Institute has elected Paul G. Haaga, Jr. as its new chairman. Haaga, an executive VP and director at Capital Research & Management Co. replaces Terry Glenn, president of Merrill Lynch Funds, who served two consecutive terms as the lobby group's chairman.

In his new role, Haaga will lead the ICI's board of governors, which is responsible for setting the institute's policies.

Haaga has worked in the investment industry for nearly 30 years, including a stint as investment manager to the American Funds, whose investment advisor is the Capital Group. Haaga was also a senior attorney for the Securities and Exchange Commission's division of investment management from 1974 to 1977, and he has been a partner in the Washington law firm Dechert Price & Rhoads.

SEC Accuses Thurlow Of Misleading Investors

The Securities and Exchange Commission has charged Thurlow Funds with posting "outdated and misleading" performance data on its Web site.

The SEC said Thurlow posted returns of more than 400% on its Web site for one of its funds from its inception through March 10, 2000, the beginning of the bear market. In fact, the SEC said that following that date, the fund's total returns plummeted by more than half. Nonetheless, Thurlow kept the impressive returns on its Web site through December 2000.

The SEC said it had earlier warned the company's CEO, Thomas Thurlow, an attorney, about stale fund data on the firm's Web site following a 1998 examination.

Thurlow agreed to pay a penalty of $20,000. The company also agreed to either abstain from posting performance history on its Web site or hire an "independent consultant" to ensure that performance history on the site complies with federal regulations.

Thurlow neither admitted nor denied guilt in accepting the commission's terms.

Conseco CEO Steps Down As Bond Default Looms

Gary Wendt has stepped down from his position as CEO of Conseco. He will stay on as chairman of the board but has handed management of the firm over to Bill Shea, Conseco's president and COO.

Wendt joined Conseco in June 2000 to turn the company around and create a "new Conseco." The company dubbed the effort the "Conseco Restoration Plan." In 2000, in fact, he expressed unguarded optimism about the company's future potential, saying, "In 2000, Conseco is a turnaround stock; in 2001 it will be an EPS [earnings per share] stock."

Indeed, while Conseco celebrated the end of 2000 with Wendt stating in a memo: "We did battle. We survived. We're positioned to thrive. And we like what we have to work with!"

Nevertheless, the company faltered, reporting a net loss of $96.9 million for the first quarter of this year.

Last quarter, the company reported a net loss of $1.3 billion. And in August, Conseco announced it would consider going bankrupt if its bank agreements did not pan out.