Industry experts say the recent push for increased transparency and disclosure in funds may actually have to opposite result, with investors receiving less or vague information in their shareholders letters, Reuters reports.

Fund executives might tread carefully, failing to go into sufficient detail regarding strategy and performance in their letters to shareholders, for fear of legal repercussions, industry and legal experts say. Corporate governance rules outlined in the Sarbanes-Oxley Act, which was passed in the wake of scandals at Enron, Tyco, and WorldCom, are worrying execs.

Approximately 500 of the nearly 8,200 mutual funds send out letters stating opinions and industry forecasts. Under the new provisions, executives must sign off on the statements and verify their accuracy. Lawsuits could arise if predictions, opinions or forecasts about a company or industry fail to materialize or prove to be incorrect. To avoid messy lawsuits, advisors are suggesting funds either separate or drop these opinions from quarterly, half-year, and annual statements.

"Personal liability concerns appear to supersede shareholders," Sarah Teslik, executive director of the Council of Institutional Investors, a pension fund lobby group, told Reuters.

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The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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