Morningstar: Investors Can Reconsider Janus

Research company Morningstar Inc. said Monday that investors could once again consider investing in Janus Capital Group Inc., one of the first mutual fund companies to be swept up in a trading scandal.

Morningstar, which is best known for its ratings of mutual funds, in September recommended that investors consider selling their Janus funds after New York Atty. Gen. Eliot Spitzer accused Janus of allowing improper trading.

The complaint has led investors to withdraw $19 billion in assets from Janus.

“We believe that investors can once again consider investing in Janus funds. We do not feel that the slate has been wiped clean, but we believe that the firm is heading in the right direction,” Morningstar analyst Dan McNeela said in a report.

Morningstar has been encouraged by steps Janus has taken to address concerns about its direction, McNeela said. Last month,

Chief Executive Mark Whiston stepped down, a senior executive in charge of institutional sales took a leave of absence and Janus reached a $226-million settlement with regulators.

Janus has said that regaining Morningstar’s favor is a major part of its efforts to restore investor confidence.