Mutual fund companies living by the adage "out of sight, out of mind" are stepping up efforts to fend off industry reforms as media coverage of the far-reaching scandals gradually diminishes, USA Today attests in its editorial pages. Fund industry lobbyists are burning the midnight oil to overturn proposals calling for more transparency into fees paid by shareholders and increased liability for trustees that fail at their No. 1 responsibility: advocating shareholders' interests. The need for industry reform is supported by the sheer number of asset managers that agreed in recent years to arrangements aimed at benefiting wealthier investors at the expense of smaller shareholders, USA Today attests.
The Securities and Exchange Commission found that in 2003, more than 44 companies engaged in these types of market-timing or late trading deals, which in many cases led to higher administrative expenses paid by investors of modest means. Nearly one-third of the shareholders who suffered losses attributed to undisclosed arrangements are eligible for financial compensation, the SEC said publicly.