|  | | 2004 News and Press Releases | | |
HEADLINE NEWS:
Fund Shareholders To Get Reimbursed In Scam, Eventually
Staff Writer
Los Angeles Times - Washington Post . October 11, 2004
_________________________________________________________________________
EXCERPT: If you owned shares in a mutual fund that got spanked by regulators, you can look forward to a little piece of nearly $2 billion in restitution money. Just don't expect it to arrive before Christmas -- this year, or maybe even next. Since the mutual fund scandal broke 13 months ago, federal regulators have struck settlements that will cost a dozen fund companies more than $2.8 billion. Of that, nearly $2 billion is earmarked for direct payments to investors. But sorting out who gets paid, and how much, is a complex task that probably will take months, according to experts on the $7.5 trillion mutual fund industry. The calculations will be performed by private consultants, who are to be hired by the mutual funds with the approval of the Securities and Exchange Commission. "There's a lot of math to be done here," said Mark K. Schonfeld, director of the SEC's Northeast regional operations and the agency's leading expert on disbursements. "That's something the consultants haven't gotten to yet." Said Morningstar Inc. fund analyst David Kathman: "Patience is the keyword." He said he hoped to see refunds "within a few months" from the fund companies that settled first, such as New York's Alliance Capital Management. Alliance agreed in December to pay $250 million in restitution and fines for distribution to aggrieved shareholders. Officials at the SEC, which is overseeing the paybacks, aren't making public predictions of when shareholders may receive their money, speculating privately that it can take six to 18 months. The long end of that range would push some payouts well into 2006. Whenever they arrive, the refunds probably will have little effect on investors' net worth. |
|
|
