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The SEC pulls back the mutual fund industry's veil of secrecy. One of the themes of this blog is exposure of the deception of small investors, so we must nod to what will undoubtedly be a lost story in the hurricane of pre-war propaganda (from The New York Times):

The S.E.C. also approved rules requiring mutual funds to disclose how they vote investors' shares on corporate issues, a change that was criticized by mutual fund executives but widely praised by shareholder advocates.

[…]

Opponents of the disclosure rule warned that it would cost investors money while yielding little benefit. Supporters of disclosure noted that the new rule would not require mutual funds to send additional information to investors, but only to make it available.

"What they are really worried about is the end of all their conflicts of interest," Tim Grant, president of Pax World Funds, said on a conference call with reporters yesterday. Pax is a mutual fund company that does not invest in companies that produce harmful products or by-products or that have interests it considers socially unacceptable.

It is somewhat amazing to realize that, in all this time, mutual fund shareholders have not had any access to how their hundreds of billions of dollars in shares were voted. The power of those votes was held behind closed doors at the largest mutual fund companies. That power, and its political leverage, can now begin to be examined by the people who rightfully own it.

Increased disclosure is a step in the right direction. This is a noteworthy day at the SEC.

{ 4:41 PM }

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