Up Front: FALLING AXES
TAKE THE MONEY AND RUN?
There may be more than meets the eye about Invesco's recent firing of star mutual-fund manager John Kaweske, axed because he failed to report personal securities trades. Kaweske says the violations were technical. This much is certain: Invesco's action has hobbled his plan to start a rival fund outfit that could have lured customers from Invesco. Last fall, Kaweske, 52, privately solicited $1 million in startup capital from friends. His next goal, according to a proposal for his Aspen Fund Group, was to raise $500 million, "a sizable portion" transferred from Invesco by investors in the three funds he managed. That's 10% of Invesco's total assets.
Invesco's firing has touched off a Securities & Exchange Commission probe that may delay the startup for a year or more. Kaweske blames the mess on friction with his bosses. Denver-based Invesco won't discuss what, if anything, it knew about Aspen, saying good fund managers leave all the time. Invesco says the sole reason it canned him was he broke company rules.EDITED BY LARRY LIGHT AND JULIE TILSNER