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Tuesday, March 16, 2004

Civil suits against mutual fund management companies will be consolidated in Baltimore, according to this article in the Miami Herald. Scroll down for an excellent timeline of the whole nasty business.

I realize I haven't been posting about this, but I have an excuse: I've been working non-stop on this in real life, plus a big dollop of Sarbanes-Oxley work.

What seems to be a recurring theme now is that Spitzer is getting fee reductions as part of the settlements he reaches. This is an excellent thing for individual investors. They actually lost very little in the market timing and late trading activities, but they have been gouged for years in fees. The highest fees, of course, are found in those fund groups sold through a broker. They do not compete on price, which is what the expense ratio really represents. These funds do not move on their own — someone has to push them. No load funds are conspicuously absent from this scandal.

Meanwhile, another writer wonders whether the competition for audiences is driving the SEC and NYAG. Maybe, but so what? In this instance, competition has sharpened all the participants.

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