Laura Unger, acting chairman of the Securities and Exchange Commission, announced in a speech before the Philadelphia Bar Association late last month that the SEC's staff is working on an interpretive bulletin which will emphasize that technical compliance with Rule 482, the advertising rule, will not protect firms from charges of fraud. Unger said the bulletin will also point out that it may be necessary to provide investors with additional facts, which give investors an accurate picture of a fund's performance in order to avoid running afoul of anti-fraud provisions.

"Twenty years ago, only 5.7 percent of Americans owned mutual funds," Unger said. "Today, some 88 million shareholders, representing 49 percent of U.S. households, hold mutual funds. These investors are entitled to rely on the integrity of the numbers included in the fund's advertising. This is particularly important given current market conditions where performance information may change significantly from day to day. The Commission has seen instances where fund advertisements are in technical compliance with Securities Act requirements by disclosing the results of a fund's most recent calendar quarter, but where even more recent, but poorer performance is not disclosed."

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