Hedge funds are the latest investment vehicle to be put through the ringer as the Securities and Exchange Commission mulls more stringent regulation.

PALM DESERT, Calif. - The mutual fund industry is entering a "new era of accountability" and should prepare to take a leadership role in restoring investor confidence.

An amended lawsuit just filed against a UBS Paine Webber/Mark Advisors hedge fund could bring to light some of the biggest challenges faced by the growing number of firms sponsoring SEC-registered hedge funds. The suit challenges earnings and investment representations, and raises questions about how these funds are explained to brokers and marketed to investors.

House Financial Services Capital Markets Subcommittee Chairman Richard H. Baker (R-LA) dashed off a letter to Securities and Exchange Commission Chairman William Donaldson last Wednesday asking the SEC to look into mutual funds fees. Fee tables aside, Baker asserted investors are "ignorant" of how much they are paying.

No, a "high-tech compliance system" is not an oxymoron. In fact, just about every mutual fund company is grappling with ways to leverage technology to increase the speed and efficiencies of mundane but vital compliance tasks, while keeping their eyes trained on the bottom line and trying to rein in costs.

Nearly one in three sales to mutual funds with front-end sales charges don't get the discount they deserve. That's according to a report jointly issued last week by the Securities and Exchange Commission, the National Association of Securities Dealers and the New York Stock Exchange.

WASHINGTON - Congress will be going over mutual fund fee practices with a fine-tooth comb to ensure investors are getting a fair shake.

SCOTTSDALE, Ariz - The American Society of Pension Actuaries (ASPA) Executive Director Brian H. Graff warned the plan sponsor and retirement-services industries to jointly get their acts together and provide investors with better investment tools, or they will have Congress on their collective backs.

The clock is ticking for the Investment Company Institute (ICI), the fund industry's largest and most influential trade group, as 11th-hour lobbying efforts to stave off proxy-voting disclosure may not cut the mustard.

The B in B shares stands for "Bogus."

It takes money to make money, the adage goes, and this is no less true for the mutual fund industry. The sale of B shares requires up-front capital to compensate brokers, and at the same time generates an asset-based income stream that varies according to the fortunes of the market. To ease both of these pressures, fund companies have securitized 12b-1 fees, basically selling off that future income for a set period of time, in exchange for an up-front lump sum.

Sarbanes-Oxley? It sounds more like a debilitating disease than a remedy for corporate malfeasance.

By John C. Wilcox, Vice Chairman, Georgeson Shareholder Communications Inc.

Shareholder resolutions reached a record number this year - 862, up from 802 last year - according to a proxy season overview report by prominent activist proponents.

Funds Not Alone in SEC's New Compliance Crusade

If you are looking for corporate integrity, check out the mutual funds. In our lifetime, we have seen major scandals or collapses of the banks, savings and loans institutions, the life insurance industry, big businesses - even religious organizations.

Harvard/Templeton China Fund Fight Turns Ugly

President Bush's plans to radically change the way Americans save for retirement offer many interesting proposals, due to their simplicity and their availability for all. But it remains to be seen whether Congress will pass these sweeping changes into law.

An inadvertent administrative glitch can be a fund advisor's worst nightmare, especially when the renewal of a fund's advisory contract is botched.

Saying that the gigantic growth of the fund industry has stretched its resources to the limit, the Securities and Exchange Commission asked fund companies last Tuesday to consider appointing chief compliance officers and put internal compliance programs in writing. More significantly, the SEC asked the public and the industry to comment on the creation of a mutual fund self-regulatory organization (SRO), much like the National Association of Securities Dealers, to work in tandem with the SEC.