Morningstar columnist Russel Kinnel reports that payouts from settlements from the mutual fund scandal of 2003 could be coming in December or in the first quarter of 2007. Remember the mutual fund scandal of 2003? This may refresh your memory:
Several name brand mutual fund families were implicated in facilitating late trading and market timing activities for favored clients. Many of the investors were 401(k) fund participants which resulted in a renewed emphasis on procedural prudence by plan sponsors, a removal of the offending funds from the fund lineup, and trading restrictions placed on plan participants.
By mid-2005 practically all of the fund families had settled with New York Attorney General Eliot Spitzer who initiated the investigations and the Security and Exchange Commission. However, settlement payments have yet to be made to fund holders.
What should 401(k) plans be doing? Checking with their 401(k) providers and mutual funds after the SEC approves the settlements.
Click here to read the Wikipedia article on the mutual fund scandal, and click here to read Mr. Kinnel’s story on the settlement.