The Securities and Exchange Commission is looking into whether mutual funds do their part to collect shareholders' money from class-action lawsuits, Lori Richards, director of the SEC's compliance inspections and examinations, told Reuters. Principally concerned with the methods investment advisors use to evaluate whether or not to file for a settlement, the Commission could reveal its findings in a month, she said, speaking at a mutual fund conference in Washington.
Last month, the SEC released monetary distribution details for how individual investors and mutual funds can claim their $432.75 million share of the $1.4 billion Wall Street research settlement. The remainder of the settlement will go to individual states, pay for investor education programs and cover the cost of providing independent research at the sanctioned firms.
In January, two law firms filed a flurry of lawsuits across the country against 44 investment advisors, accusing them of failing their investors by not collecting settlement money for class-action lawsuits as far back as 1977. According to one class-action consultant, Brad Heffler, CEO of Claims Compensation Bureau, a Conshohocken, Pa., over the past 10 years, as many as 75% of investors, both large and small, haven't asked for their fair share of settlements.
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.