New York Attorney General Eliot Spitzer, in a repeat of his 2004 rule, plans to force some mutual fund firms to cut fees to obtain compensation for alleged past overcharging, according BusinessWeek.
Spitzer alleged that small investors are paying $10 billion a year too much in management fees. But, for decades courts have given the $8 trillion mutual fund industry a pass on setting fees by finding that charges were not excessive. No investor has ever persuaded a judge to force a fund to roll back its fees. Most suits are dismissed before trial because the companies argue that their fees are in line with other companies.