Millions of Americans invest their retirement savings, college savings, and life savings in mutual funds. As of 2004, the mutual fund industry was a nearly $8 trillion business. Unfortunately, however, the over 53 million American households that have chosen to entrust their hard-earned dollars to mutual fund advisors and distributors are being taken advantage of in the form of excessive and unlawful fees and other abuses, which ultimately deplete the return on investment they seek.
Mutual funds are overseen by boards of directors who are supposed to be independent from the advisors who create and run the mutual funds. These directors are to serve as "watchdogs" and are charged with looking out for the interests of mutual fund investors; however, these "watchdogs" often serve as nothing more than rubberstamps for the advisors, typically approving the advisors' proposals in rote fashion.
The recent, highly-publicized scandals involving late trading and market timing in the mutual fund industry demonstrate that not enough is being done to protect investors. This is no surprise to Richardson, Patrick, Westbrook & Brickman. Before the scandals that plague the mutual fund industry caught the attention of various regulatory agencies, our attorneys were at the forefront of the fight to protect mutual fund investors.
While late trading and market timing are two of the many ways mutual fund investors can suffer when the fund directors do not perform their duties and allow the advisors to take advantage of the mutual funds, the most common abuse is excessive advisory fees. For decades, the mutual fund industry has violated its duties to investors and the mutual funds they own by charging exorbitant fees.
Richardson, Patrick, Westbrook & Brickman has sought to hold the mutual fund industry accountable for reaping excessive fees and profits at the expense of fund investors. Recently, our attorneys have obtained favorable settlements for our clients against some of the mutual fund industry's worst offenders.
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