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But Mercer Bullard, founder and president of Fund Democracy, said the rule protects investors and an amicus brief filed late last week seeks dismissal of the Chamber's claim.
"More than 90 million Americans have trusted their financial security to mutual funds - a trust that was betrayed in recent years as dozens of fund managers permitted market timing and late trading that cost fund shareholders million of dollars," Bullard said. "These abuses can be traced directly to failure of a fund's governance and, in many of the cases to fund boards dominated by executives of the fund's manager.
"The Commission rules to strengthen the independence of fund oversight are an appropriate response to evidence of a systematic failure among fund managers to fulfill their fiduciary obligations to fund share holders," said Barbara Roper, director of Investment Protection at Consumer Federation of American. She added that the rules are necessary to prevent additional abuses, conflicts of interest and to restore shareholders' piece of mind.