Monday, April 20, 2009

So sue me: Lawsuits to recover mutual-fund losses are rarely successful

Posted by Plus Master at 8:04 AM
 
Alas, suing funds and fund managers typically has brought less than an ounce of flesh, if anything. The fund world is full of tales of woe told in court to no effect.
But that hasn't stopped investors from trying, and some recent cases bear watching for consumers, because they show both what might actually work and the dangers of owning a fund that has been sued.

Over the last two months, several different arbitration cases have come back against Morgan Keegan, which runs the RMK funds, including some bond issues that imploded last year. And last week the state of Oregon sued OppenheimerFunds, alleging that the money manager understated the risk of a bond fund that is part of Oregon's state college-savings plan. Last fall, Prudential Financial sued State Street Corp. seeking restitution for retirement plans invested in State Street bond funds that suffered heavy losses.
And there has been an avalanche of lawsuits in the case of the Reserve Primary Fund, which last fall became the first retail-sold money-market mutual fund to "break the buck," the constant $1 price per share for money-market investments.

This article, from Chuck Jaffe, a senior MarketWatch columnist, can be found here on the MarketWatch website.
POSTED IN Errors & Omissions (Non-Medical)

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