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Its funds racked up stunning losses in the bear market, and in 2004, Janus admitted that it had allowed some big investors to market-time funds to the detriment of the little guy.
Now, after a major management overhaul, Janus is mounting a comeback.
Recently almost 80 percent of the group's stock funds ranked in the top half of their categories over three and five years, and 50 percent were in the top third. In 2002 the majority of its funds languished in the bottom half. Not surprisingly, investors are putting money back into Janus funds.
Not everyone, though, is ready to forgive and forget.
Some financial advisers and fund experts remain wary. "There's no reason to give money to a company that has betrayed its investors," says Roy Weitz, an industry gadfly who runs FundAlarm.com. (His ban doesn't include Janus Mid-Cap Value, a Money 70 pick, or Small-Cap Value, which are run by a firm that Janus acquired.)
Still, I think Janus deserves credit for making substantive changes. And it offers some excellent funds. If Janus stays the course, it will have earned a second chance. Here's why it's on the right track.
You might recall old Janus commercials featuring dogged analysts climbing down manholes to investigate companies. Janus' real-life researchers, though, failed to unearth the truth about such looming disasters as Enron and AOL Time Warner.
Improving research has been a top priority for Janus CEO Gary Black, a former Goldman Sachs exec who took the reins early last year. Black has boosted the number of stock analysts by 50 percent and hired ones with more experience.
Janus has also brought in a risk-management director to ensure that managers don't all load up on the same dicey stocks, as they did during the bubble.
Says Black: "We want to make sure that risk is an ingredient in the decision-making process."
Not that Janus managers are likely to ignore risk these days. The gunslingers of the 1990s are gone. Today's top managers, including David Corkins of the flagship Janus fund and David Decker of Janus Contrarian, stayed true to Janus' original strategy of growth stocks at a reasonable price.
Says Morningstar analyst Karen Dolan: "The changes show that Janus is returning to its roots."
In the late 1990s, Janus courted performance-chasing (read: naive) investors. Now it wants shareholders who'll stick around.
So its marketing emphasizes asset allocation and risk, not raw returns. It's an unglamorous message designed to appeal to financial advisers and 401(k) plan sponsors, who direct most fund cash flows. (Janus funds will remain available no-load through fund supermarkets.)
So should you put money in a Janus fund? In my opinion, for most people the answer is not quite yet. Janus still has to show that its funds can hold up better in a bear market than they did last time. And when growth stocks start to lead the market again, as they will someday, you'll want to see that Janus can keep up.
That said, if you've got limited choices in your 401(k) plan and Janus funds are among them, both Janus and Janus Contrarian are worth a look.
The flagship is a mix of big-cap high fliers and steadier stocks. Among its top holdings: Boeing, Yahoo and Precision Castparts, which makes industrial and aerospace parts.
Janus Contrarian invests wherever Decker sees opportunity, making it a good complement to a large-cap or total stock market index fund.
Decker looks for bargains - he bought Apple at $9 (split adjusted) a share in 2000 and sold off the stock at $60 last year, when he felt the risks outweighed the rewards.
That kind of approach should give Janus a great shot at pulling off its second act. 
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