J.P. Morgan [profile] is again in the news over an asset management scandal, though this time it doesn't involve a mutual fund. On Friday Reuters reported that the Department of Labor is examining possible fiduciary violations related to the $1.8-billion J.P. Morgan Stable Asset Income Fund, and InvestmentNews followed up on the story yesterday.

The fund in question is a stable value collective fund, a kind of insurance-wrapped short-term commingled bond fund used only by institutional investors like 401(k) plans, often filling the same slot as a money market mutual fund.

The Stable Asset Income Fund is a commingled fund but not a mutual fund, despite the InvestmentNews headline. The reported investigation adds insult to injury after separate regulatory investigations started earlier this month after a New York Times expose attacked J.P. Morgan mutual fund sales tactics.

The new scandal involves the stable value fund's use of private mortgage debt, which once amounted to 13 percent of its assets but now weighs in at four percent.

A J.P. Morgan spokeswoman declined to comment to MFWire for this story. The DoL declined to comment to both Reuters and InvestmentNews, neither confirming nor denying the existence of the investigation.

The prior chief of the DoL's Employee Benefits Security Administration, Brad Campbell, and Fishman Haygood Phelps Walmsley Willis & Swanson attorney Joseph Peiffer both weighed in for the Reuters piece. InvestmentNews' article included comments from several 401(k) industry insiders, including: advisor Michael Francis, consultant Jason Roberts, and attorney Marcia Wagner. 

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