Whiston, 42, is being succeeded by Steve Scheid, 50, who has been chairman of Janus since the start of the year, the company said in a statement. Janus also said costs from the trading investigation may include sanctions and fee cuts, and have a ``material'' effect on the firm.

Janus and New York Attorney General Eliot Spitzer are trying to reach a settlement on allegations that the company allowed short-term trading that may have contradicted prospectuses and reduced returns for mutual fund investors. More than 80 executives have lost their jobs in the industrywide review of trading and sales practices at more than 20 companies.

Whiston knew about short-term trading in Janus funds before the investigation became public. The company said last month that Whiston had commissioned a study of trading by clients that was was completed in November 2002.

In December, Janus split the roles of chief executive and chairman, with Whiston waiving his right to succeed Landon Rowland in the latter post. In doing so, Whiston forfeited his right to a severance payment of as much as $23 million that he could have gotten for failing to become chairman. Scheid, former vice chairman of Charles Schwab Corp., took that role.

Janus acknowledged in December that it had special trading arrangements with 10 investors starting in November 2001. The trades continued until at least last June, according to Spitzer's civil complaint against one frequent trader, the hedge fund Canary Capital Partners LLC.

Janus set aside $62.8 million in the fourth quarter for costs from the investigation. The amount includes $31.5 million to repay fund investors hurt by improper trading.

(Bloomberg)