|
|
|
|
Who We Are
Money Focus Mutual Funds Insurance Mortgages Taxes Step by Step Hot Topics Contact the Editor
Featured Site AfterHourTrades.com, Inc. Featured Columnist: |
Other Fund News
In other fund news that will be good for all investors concerned, the S.E.C. has made the practice of directed trading illegal. The use of brokers for trades by fund managers was previously a legal transaction. What the Security and Exchange Commission took exception with was the practice of rewarding brokerages for selling their funds as part of their services. Instead of looking for the best price and execution, the practice often led to higher fees for shareholders.
Recent scandals have uncovered some serious conflicts of interest as fund managers can control other funds for different clients. Managing a hedge fund for wealthy investors as well as a mutual funds for the less wealthy presents ethical questions in terms of trading times, research, and profit taking, often at the expense of the common shareholder. The S.E.C. also required the fund managers to disclose this cross over employment, compensation and whether they have a stake in the stocks of the funds they manage.
While these measures should have been self policing issues, the temptation to create wealth is often centered on the manager first with the investor coming in second. That's too bad and with any luck, these and other regulations will put the investor at ease about the folks who are managing their nest eggs.
|
