Does SEC Scrutiny Improve Mutual Fund Disclosures?

Millions of investors rely on the disclosures of U.S. registered mutual funds in making their investment decisions, but some of the most influential industry opinion leaders and legal scholars have criticized the quality of those disclosures. Like public companies, mutual funds are subject to both internal and external oversight. In contrast to public companies, though, the funds have an acute agency conflict between their management companies and investors, while the internal governance for mutual funds, especially the board of directors, is often ineffective. With weak internal oversight, the role of external oversight becomes particularly important. The most important external oversight … Read more