The Sec Flags Joe Montana

That Joe Montana has it all, doesn't he? Super talent, beautiful wife, three delightful daughters. Saw him with the kids in an ad for some mutual fund. Come to think of it, haven't seem those ads lately. Wonder what happened?

What happened was that the Securities & Exchange Commission threw a penalty flag on Franklin Group, the mutual-fund company that the San Francisco 49ers superstar represents. It seems the SEC didn't care for the six different ads in which Montana, his wife, Jennifer, and their daughters appeared. The ads, which ran from last August until Dec. 31 in magazines including BUSINESS WEEK and Money, promoted funds for retirement planning, college planning, and equity investments. The one for college planning even urged readers to call 1-800-DIAL JOE for more information.

The SEC, it's safe to say, has nothing against gridiron heroes. But a 1940 law prohibits testimonials for investment advisers. Mutual funds are required by law to hire investment advisers, so by extension the SEC applies the ban on testimonials to funds, too. Franklin, for its part, says that it would have kept running the ads had the SEC not stepped in. Its original contract with Montana was for one year, though neither the company nor the quarterback's agent will say if the deal is still in place.

Endorsements from the rich and famous may still have a home on the financial pages, though. The trick is to make sure that your celebrity is the representative of an investment firm as a whole, and doesn't just endorse a particular product. That's how Smith Barney, Harris Upham & Co. escaped the ire of the SEC. From 1979 to 1987, the late actor-director John Houseman pitched imperiously for the firm--"We earrrrrrn it." Remember? "It was never an issue," says Smith Barney spokesman Robert Connor. "We weren't using a person to endorse any one single product. We were using a spokesman simply to represent us."

There's no indication that Montana will play a similar role for Franklin. That may disappoint fans of the quarterback, whose ailing right elbow forced him to sit out the entire 1991 football season. If his admirers want to see him before training camp starts next summer, they're better off looking at trading cards or cereal boxes.