Vanguard announced today a two-for-one split of shares of Vanguard Total Stock Market ETF (VTI), Vanguard Emerging Markets ETF (VWO), and Vanguard Extended Market ETF (VXF)."

The effect of Vanguard's share split will be to allow investors to trade the funds in smaller amounts. For now, each of the three ETFs' share price is more than $100. Shares of Vanguard Total Stock Market ETF are about $138, meaning that's the de facto minimum investment for any investor who wants to buy the fund, and the smallest increment in which existing investors can buy and sell. After the split the new number will should closer to $69."

In her complaint, Lawson alleges Fidelity retaliated against her after she pointed out violations of federal rules 'relating to fraud against shareholders of Fidelity mutual funds.

...She raised concerns that initially drew praise but also hostile responses from others, she claims, and eventually led Fidelity to give a promotion to another employee 'to cover up fund profitability issues.'

She continued to raise issues and also contacted federal agencies including the Securities and Exchange Commission, the suit states. (The head of the SEC's Boston office, David Bergers, declined to comment.)

According to Lawson's suit, she was yelled at, berated, and assigned unrealistic deadlines for projects as a result, leading her to resign last fall. She also said Fidelity wouldn't allow her to speak with the trustees.

I am currently in a predicament where I can no longer honestly stand behind the financials that are presented to the Fidelity Mutual Fund Board of Trustees,' she wrote colleagues in a resignation letter."

Vanguard's Quantitative Equity Group (QEG) has begun managing the portions of Vanguard U.S. Value Fund and VVIF–Small Company Growth Portfolio previously managed by Grantham, Mayo, Van Otterloo & Co., LLC (GMO). QEG has also assumed primary responsibility for the assets previously managed by GMO for the Vanguard Explorer Fund.

QEG joins AXA Rosenberg Investment Management LLC as a co-advisor for Vanguard U.S. Value Fund. QEG now oversees approximately one-third of the fund, employing a quantitative investment approach to select stocks from the Russell 3000 Value Index that it deems attractive.

QEG will share advisory responsibilities with Granahan Investment Management for managing VVIF-Small Company Growth Portfolio. The firm will also expand its portfolio management role for Vanguard Explorer Fund, assuming responsibility for most of GMO's former portfolio, with the remainder allocated to the other advisors of the fund.

"Vanguard brings a vast amount of experience and expertise to its quantitative mandates and the funds' boards of trustees are highly confident in the group's ability to complement the strategies of the existing advisors and produce competitive long-term returns," said Mr. Brennan. "GMO has provided advisory services to Vanguard funds since 2000 and, on behalf of our shareholders, we thank them for their efforts."

The closed-end Herzfeld Caribbean Basin fund (NASDAQ:CUBA) CUBA, the only Cuba fund, shot up 17% to 8.70 on Tuesday. A record 1.44 million shares traded after the ailing 81-year-old dictator announced he will resign as president. Castro has held power since overthrowing Gen. Fulgencio Batista in 1959.

The fund seeks long-term capital appreciation and invests in companies from 20 countries in and around the Caribbean.

As a closed-end mutual fund, the Herzfeld fund trades at prices that might differ from the per-share value of their assets. The fund was trading at a 9.61% discount to its net-asset value prior to Tuesday.

Its surge signals hope that Cuba's future will be far different than the past 49 years under Castro. U.S. trade embargoes, enacted to protest Castro's Communist regime, have made life tough on the island nation."

Ritchie Capital Management, founder Thane Ritchie, an employee and the Ritchie Multi-Strategy Global Trading Ltd. hedge fund are paying a total of $40 million to settle charges of illegal late trading.

The settlement is one of the largest the SEC has secured since it started an industrywide crackdown in 2003 against alleged mutual-fund trading abuses.

The SEC said that from January 2001 through September 2003, Ritchie Capital placed thousands of late trades in mutual fund shares and used news and information breaking after the market closed to make its trading decisions while receiving the same day’s value for the funds traded.

Late trading involves favored customers receiving the market-closing price for mutual fund shares for orders placed after the stock market closes for the day at 4 p.m. EST."

Dodge & Cox Funds, one of the most popular U.S. mutual fund families, said it will reopen to new investors its flagship Stock fund and its Balanced fund, which invests in stocks and bonds, after performance lagged its peers for the first time in more than a decade.

The $63 billion asset Stock fund and $27.1 billion balanced fund will reopen on Monday. Dodge & Cox had in 2004 stopped accepting money from new investors after assets in the funds had grown too rapidly for it to invest easily. It continued to accept money from existing investors."

In a statement on Friday, Dodge & Cox said investors have recently been redeeming money from the funds because of weak returns and volatile markets....the Stock fund last year returned 0.1 percent, trailing 61 percent of its 'large-value' peers, while the Balanced fund returned 1.7 percent, lagging 89 percent of its 'moderate allocation' peers. Both funds had outperformed a majority of their peers in every year over the previous decade..."

Merrill Lynch & Co., the world's largest brokerage, lost nearly $10 billion in the last three months of 2007, its biggest quarterly loss since it was founded 94 years ago, after writing down $14.6 billion of investments slammed by the ongoing credit crisis….Merrill Lynch posted a net loss after preferred dividends of $9.91 billion, or $12.01 per share, compared to a profit of $2.3 billion, or $2.41 per share, a year earlier….Wall Street analysts had been forecasting a loss of $4.93 per share…"

But the doomsayers are looking for signs of disaster where none exist. The American economy has performed better in the 1990's than at any time in history, and there is no end of that success in sight….The bubble theory rests on arguments that the stock market is overvalued…Assets are said to have become overvalued, leading to overconsumption and an overheating of the economy that will inevitably end in a violent correction -- a stock market crash. But this argument will not stand up to a careful analysis…

The pessimists' misinterpretations begin with stock prices, which have indeed grown rapidly... However, values are highest in the sector where growth prospects are highest and demand is accelerating: technology. With the technology stocks excluded, the price-earnings ratio for the rest of the companies in the index is around 19. Adjusted for interest rates, that's comfortably in line with the experience of the past few decades."

Stock mutual funds made 2007 the fifth year in a row of gains. But it often didn't feel like the market was advancing.

The year was marked by volatility. U.S. diversified stock funds lost ground in four months -- February, June, July and November.

The main culprits were the subprime lending crisis and ensuing credit crunch. Investors also worried about inflation, soaring key commodity prices, slowing U.S. economic growth and a falling dollar. And don't even ask about geopolitical tensions.

Still, the market grew. U.S. diversified stock funds racked up a total return of 6.85% for the year through Dec. 27, according to Lipper Inc. That lagged their five-year average annual return of 13.95% and 15-year average annual gain of 9.98%. Growth walloped value in all size groups. Mid-cap growth beat all other categories, averaging 17.04%.

The leading sector was natural resources, which skyrocketed 40.01%."

Most mutual funds that invest based on Islamic principles have largely weathered the recent credit turmoil. Two Islamic funds offered by Azzad Asset Management, smaller than the Amana and its $333.1 million of assets, also are beating the Standard & Poor's 500-stock index since the start of this year, after trailing the broad market for several years.

Dow Jones Islamic Fund is up 13.3% year to date, which ranks it in the top 4% of its category of large- market-capitalization stocks. The fund, managed by Allied Asset Advisors, tracks the Dow Jones Islamic Market Index, which is a product of Dow Jones & Co., publisher of The Wall Street Journal.

A sister Amana fund, Amana Growth Fund, isn't doing quite as well. The fund has $680 million of assets and invests in companies whose earnings are expected to rise faster than the broader market. It has returned 11.5% this year. While that beats the broader market, it still trails its growth-type peers by 1.4 percentage points."

Under the proposed changes, investors would receive a summary of information about a fund, on paper or electronically, depending on their preference. The SEC also proposes encouraging mutual-fund companies to make greater use of the Internet, giving investors the choice to request a printed copy of the full prospectus or obtain more-detailed information online.

The SEC will seek public comment on the proposal for 90 days. Adoption of any changes requires a second SEC vote."