WASHINGTON, Jan. 23 /U.S. Newswire/ — The first grassroots campaign website solely dedicated to representing individual investors announced the launch of a new campaign to return the billions ofdollars skimmed from investors by the mutual fund industry and end the secrecy of SEC investigations that protect Wall Street rather than investors.
Last week, The New York Times reported that 14 of 15 Wall Street brokerages the SEC investigated had received cash from funds, and that 10 of the 15 had received revenue-sharing payments in the form of commissions for trading stocks for the funds’ portfolios, but the SEC declined to reveal the parties involved.
The www.RestoreTheTrust.com website was launched last year at the height of the accounting scandals. Thanks in part to 55,000 e-mail letters from RestoreTheTrust.com investors, Congress passed and President Bush signed a tough new law last year. RestoreTheTrust.com is launching a new campaign on behalf of investors to help clean up the recent scandals in the mutual fund industry that are pilfering billions in profits from 95 million investors, half of all U.S. households. The first goal is to demand that the SEC require the brokers, hedge fund and mutual fund managers responsible for the scandals to give back the estimated $5 billion in profits they skimmed from investors by manipulating the market and banning the responsible individuals from the securities business.
“It’s been four months since the New York Attorney General’s office uncovered the first of these mutual funds scandals while the SEC was asleep at the switch,” said Pamela Gilbert, co- founder of RestoreTheTrust.com and former executive director of the Consumer Product Safety Commission. “Now four months later, and over a dozen more scandals later, the SEC finally has proposed new trading rules for mutual funds. But we know from experience that if individual investors don’t keep the pressure on, the SEC will do the bidding of the mutual fund industry and delay reform until the headlines fade. The SEC relies almost exclusively on secret settlements to protect the industry, instead of taking the culprits to trial and holding hearings to educate investors and to stem these widespread abuses. This anti-investor policy represents a dereliction of the SEC’s duty.”
One quarter of mutual fund brokers surveyed by the SEC acknowledged that certain preferred customers were allowed to make illicit after-hours trades. Investigators have reported abuses by dozens of firms in the mutual fund industry whose assets account for 17 percent of the $7 trillion industry. Mutual fund companies skimmed money using two schemes: market timing and late trading. RestoreTheTrust.com has setup an e-mail program for its 10,000 investor members at http://www.RestoreTheTrust.com, so they can send letters to the SEC expressing their outrage at the SEC’s lack of strong action to combat the mutual fund scandals.
“President Bush and the SEC Chairman Donaldson have demonstrated that their priority is protecting Wall Street campaign contributors, not Main Street investors,” added Gilbert. “We’re launching this new RestoreTheTrust campaign, so investors can let the SEC know that they will no longer accept closed door, backroom deals. The SEC must get investors’ money back, take the abusers to trial, ban them from the industry and truly reform the industry by holding hearings to educate investors, so they’re never shafted like this again.”
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