|
|
During the past 20 years, the author has watch China move from being a developing country into an industrial superpower
Money Moves, 5/24: Chocomize Co-Founder Fabian Kaempfer talks with Bloomberg’s Deirdre Bolton about the business of customizing chocolate
The president's campaign has a new rule—no cell phones allowed
In honor of remote control inventor Eugene Polley, we recognize other influential but neglected inventors who have felt the sting of stolen glory
Forget Adderall. Traders now pop chia seeds to stay focused and energized
The Italian automaker and others are adding hybrid technology to elite cars
The storied bridge that links San Francisco and Marin County changed the face of California
Schools cultivate ties with startups before they're big successes
Dave McClure's traveling venture capital show scours the world for promising startups
Get Four
|  | SEPTEMBER 27, 2004
By Amey Stone Answers for Scammed Fund Investors [Page 2 of 2] Q: How much money are individual investors likely to get back? A: It's going to vary widely. If your fund wasn't targeted by market-timers, you'll get nothing. For those in one of the dozens of funds aggressively targeted, the harm suffered to portfolios could vary from a few pennies to, in the worst cases, as much as 10% of a shareholder's investment. A few individuals will likley have lost thousands of dollars due to market-timing and late trading, says Bullard. "That is the person for whom you really want to get this right." For the overwhelming majority of shareholders, however, restitution will be small potatoes. Regulators wrangled about $1.4 billion in assets earmarked to be returned to shareholders out of approximately $2 trillion in affected fund assets affected. If you figure everyone has a $10,000 investment, that works out to under $10 per person. "This is not going to be an enormous windfall for anyone," Friedman says. Q: What about the lawsuits? A: All the market-timing cases have been consolidated in a single court in Maryland. Plaintiffs' lawyers say they can prove that shareholders are due much more money than regulators settled for. This process could take up to five years to complete. Even though fund companies have basically admitted improper behavior, proving they broke the law and that their customers deserve more money than the settlements have already recovered for them won't be easy, says Friedman. But plaintiff's attorneys say all the facts aren't out yet. "We certainly don't believe the amount they agreed to will cover everything," says Glen Abramson, a lawyer with Berger & Montague, who was feverishly working to meet a Sept. 29 deadline to file an amended complaint detailing further charges against fund companies. "When the complaints go in, you'll see there are more to these cases than the mutual funds have said at this point," he says. Q: So should investors be doing anything now? A: No, and that's the good news. Fund companies have records of all shareholders, so they're automatically represented in the settlements and the class actions. If you sold your funds in a company that's facing charges and moved, you should make a call to make sure the company has your current address. Otherwise it shouldn't be necessary to contact the fund. As for the class action, when a settlement or a verdict is reached, every investor will receive a notice of the amount due. They'll then have the opportunity to opt out of the class if they feel that suing as an individual would produce a better result. It's unlikely anyone would pursue that option, given the amounts most individual shareholders are likely to be due. For most fund investors affected by the scandal, compensation for damages is likely a small extra bonus that will show up long after they've stopped wondering what's due. While it won't be big, it's still worth waiting for.
 Stone is a senior writer for BusinessWeek Online in New York Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
 Copyright 2004, Bloomberg L.P.Terms of Use | Privacy Notice |
Printer-Friendly Version
