The trading scandal has put the Canadian fund industry through the ringer in the past year. But Investment Executive columnist James Langton believes that despite the precedent-setting cases and record $200 million in fines and disgorgement (US$166 million), investors have reason to remain dissatisfied.
Although the settlements stated that the eight fund companies charged garnered only $27 million (US$22 million) in revenue from the market timers, Langton charges that what the settlements do not mention is that the institutional investors who placed the trades reaped $300 million (US$248 million) in profit. Further, none of them have been penalized.
And while the
As Langton sees it, more Canadian fund firms certainly are guilty of market timing, as evidenced by the subsequent settlements between broker/dealers and the
At the least, one Canadian fund analyst says, the fund companies in the settlement were forced to pay more than seven times the amount they garnered in profits, which, in the grand scheme of things, were not that significant.