19 June 2011

Fund investors given short shrift by US Supreme Court

A recent judgement by the US Supreme Court relies on hair-splitting as it declares that the management company of a mutual fund cannot be sued by investors that are misled by a prospectus that is issued by a managed by the company. As a consequence investors cannot get any compensation from the people that are actually behind the misleading information. While this case is a purely US case it is representative for the cavalier attitude that investors are treated by regulators, courts and governments in most jurisdictions.