WEEK IN REVIEW : BETTER BEWARE, SPINMEISTERS

The Securities and Exchange Commission is still on a tear about insiders scooping up all the money before the public is let in on a deal. The latest to fall afoul of the increased enforcement effort are Monetta Financial Services Inc. of Wheaton, Ill., and its president, Robert Barcarella. They’re accused in a civil action of “spinning.” The insiders — in this case, three fund directors — turn around and sell, or spin, the stock to the public, often netting themselves a nice bundle. Those involved here made about $100,000, the SEC alleges. All those involved deny any wrongdoing.

Congress is learning

For years, financial advisers have been urging clients to put any surplus in their personal budgets into an IRA. Now the chairman of the House Budget Committee says the government should do the same thing. Rep. John Kasich, R-Ohio, wants Congress to consider putting some of the country’s projected $8 billion surplus into individual retirement accounts for workers paying into the Social Security system.

House Speaker Newt Gingrich also says the surplus should be used to protect Social Security and “to begin the transition so that our children have the opportunity to have a personal retirement account with an interest buildup.”

Carrying a Torchmark

Waddell & Reed Financial Inc. hit the market Thursday and the market smiled. The fund company sold about a third of itself, 21.7 million shares, which went like hot cross buns at a Communion breakfast.

The stock opened at $23 and ended the day at $26.43, giving Waddell a market capitalization of $1.67 billion. Its three dozen funds control $23.4 billion, making it the country’s 42nd-largest fund group, according to the Investment Company Institute. Most of the IPO’s $499 million will be used to prepay $428 million in promissory notes owed its parent Torchmark Corp.

What would J.P. say?

Moody’s Investors Services dropped the long-term credit rating of J.P. Morgan & Co. Inc. to Aa from Aaa and of Morgan Guaranty Trust Co. to Aa-pl
us from Aaa. The focus on investment banking, “greatly increasing the company’s risk profile,” was responsible, a Moody’s spokesman says. Underscoring the risk, Morgan’s suit charging three South Korean banks with backing out of a derivatives deal opened in New York.

Money Store merged

First Union Corp., the favorite bank of almost nobody in Philadelphia except its stockholders and those of CoreStates Financial Corp. (who approved the $16.8 billion purchase by the Charlotte, N.C., bank) signed a deal to buy the Money Store Inc. for $2.1 billion in stock at $34 a share. The deal would make the First Union the nation’s top home-equity lender and give it offices in all 50 states. The Money Store is also tops in Small Business Administration loans.

Hiring now

Looking for a job? Gilman & Ciocia Inc., based in Great Neck, N.Y., is crowing about having hired 42 planners since November. That gives the company, which also maintains a tax practice, 155 planners in 128 offices in 28 states. Enter the total here and also on line 28(c), Schedule G.

Translation, please

The CEO of Deutsche Bank AG, Rolf Breuer, says he isn’t abandoning investment banking in the United States, despite losses in Asian trading in the New York office estimated at $50 million. About the 9,000 people he’s firing worldwide? “There are losers in this bank and we are getting rid of them.”

Bloomberg News contributed to this report