WEEK IN REVIEW

Northwestern quietly buys Russell Co.

Frank Russell Co. didn’t merge with Jack White & Co. to form Jack Russell, a real terrier of a firm. Instead, it gave its index and the rest of itself in marriage to Milwaukee’s Northwestern Mutual Life. Nobody’s talking money but everybody’s saying the price was about $1.2 billion. All in cash, thank you.

Russell advises $1 trillion and manages $42 billion, so Northwestern is suddenly a big deal in investment management. “Russell’s the 800-pound gorilla of the pension consulting world,” said Richard Lannamann, managing director at headhunter Russell (no relation) Reynolds Associates in New York. He adds that its “commingled multimanager products could offer a high-quality, lower-cost alternative to mutual funds and wrap fee brokerage accounts.”

Russell will “operate as a free-standing subsidiary,” said chairman George Russell, 65, the eponymous founder’s son. He sold the Tacoma, Wash., firm for estate-planning reasons, he said.

Jett all the way

Securities and Exchange Commission staff members still want Joseph Jett. Mr. Jett wants the SEC — and its $8.21 million bill — off his back.

Both sides filed appeals to different parts of SEC Judge Carol Fox Foelak’s July 21 ruling. She determined that the former bond trader is not a crook — he has never been charged with criminal violations — although she said that his “intent was to deceive and defraud” and “to book profits which were in fact nonexistent.” She ordered him to repay the bonuses he earned from Kidder Peabody & Co. as he helped it into the choir invisible.

Mr. Jett says he can’t afford a lawyer and is representing himself. His brief alleges discrimination because he is black, and reads: “His innocence would be apparent to a jury of Klansmen.”

The Jett allegations and unrelated bond losses led General Electric Co. to sell most of Kidder to Paine Webber Group Inc. in 1994.

What, me worry?

Mr. and Ms. Investor put $3.08 billion into stock mutual funds in the week ended last Monday, according to Trimtabs.com in Santa Rosa, Calif., even as Standard & Poor’s 500 stock index dipsy-doodled downward 2.63%. That topped the week before, when more-jittery folks added only $1.32 billion.

Bond and hybrid funds more than doubled their intake to $1.57 billion in the most recent week.

The real skinny

Cendant Inc. dropped yet another shoe, reducing its earnings over the last three years by about $600 million, $392 million of it last year. The company’s stock has fallen 60% since mid-April when it discovered some big-bucks bad

bookkeeping in its CUC International unit. Cendant was created last year with the merger of CUC and HFS Inc.

Chairman Henry Silverman, 58, said, “Today is the first day of the new Cendant.” The stock is up a couple of points from its 1998 nadir of $14.13, reached Tuesday.

Good, Lord

Lord Abbett & Co. has persuaded Fuji Bank Ltd. to sell a quarter of its European fund management arm and plans to buy more of it in the next couple of years. . .The year 2000 is costing Charles Schwab Corp. $75 million, $21 million of which has already been spent in making sure its computers know what century it is. Its average daily trades, by the way, hit a 14-month high in July: 102,600. . .Chase Manhattan Corp. set up a team to advise and finance the sports biz. Robert J. Tilliss will coach. . .Pilgrim Baxter & Associates of Wayne, Pa., is giving its 17 new PBHG Advisor Funds to SEI Investments for back-office work. It also renewed its five-year-old deal with its Oaks, Pa., neighbor to administer and distribute its $7.4 billion-asset no-load PBHG Funds and PBHG Insurance Funds.

closing Quote

“I would not buy it for exactly the reason they are selling it. They need more capital and they’re afraid of a down market.”

— Value investor David Dreman on Goldman Sachs Group LP’s planned IPO. Page 3

Bloomberg News contributed to this report