Responding to the growing scandal in the U.S. mutual fund industry, the Association for Investment Management and Research says it believes that abusive trading practices by mutual fund managers make a mockery of the effectiveness and integrity of the global financial markets.

AIMR says that “Late trading is clearly illegal. Market timing trades by fund managers in their own fund shares, while not illegal, harm fund investors. Fund managers’ use of fund information for their own personal gain or for favored clients of the firm increases trading costs and reduces returns for the mutual fund and its investing clients. This is clearly not in the best interests of ‘rank and file’ mutual fund investors.”

AIMR says the recent allegations of these practices harm the reputations of investment professionals who act with integrity, who place the interests of their investing clients first, and who treat all their investing clients fairly.

It adds that “fund managers, individuals and firms, have the same fiduciary and ethical responsibilities to every investing client regardless of the size of his or her portfolio. They must have effective procedures in place to ensure that all clients are treated fairly.”

AIMR says it encourages a thorough investigation of all firms alleged to be engaged in such practices,.


http://www.newswire.ca/en/releases/archive/November2003/05/c8505.html