Mutual Fund Trading Abuses : Lessons Can Be Learned from Sec Not Having Detected Violations at an Earlier Stage

Recent violations uncovered in the mutual fund (MF) ind. raised questions about the ethical practices of the industry & the quality of its oversight. A widespread abuse involved MF co. invest. advisers (firms that provide mgmt. & other serv. to MF) entering into undisclosed arrange. with favored cust. to permit market timing (frequent trading to profit from short-term pricing discrep.) in contravention of stated trading limits. These arrange. harmed long-term MF shareholders by increasing costs & lowering fund returns. This report: identifies the reasons that SEC did not detect the abuses at an earlier stage & the lessons learned in not doing so; & assesses the steps that SEC has taken to strengthen its MF oversight prog. & improve MF co. oper. Tables.Hillman, Richard J. is the author of 'Mutual Fund Trading Abuses : Lessons Can Be Learned from Sec Not Having Detected Violations at an Earlier Stage', published 2005 under ISBN 9780756748265 and ISBN 0756748267.