Janus Capital Drops

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Morningstar says investors should consider selling their stake in mutual funds run by fund families Janus Capital (JNS ), Bank of America (BAC ), Strong Capital, and BankOne (ONE ). Last Wednesday, the New York State Attorney General filed a complaint alleging that these prominent firms had agreed to grant special trading access to a hedge fund, which may have hurt investors in the process. In the aftermath of the claim, Robert Gordon stepped down as Bank of America's mutual-funds chief. Merrill Lynch downgraded Janus to neutral from buy, citing in part the investigation of these trading misdeeds, as well as disappointing August-end assets under management. Janus shares fell.

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