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Retirement Plans and the Great Mutual Fund Scandal
During the past 2 years, the public has been inundated with reports of widespread misconduct by mutual funds and their managers. According to published studies (Zitzewitz E: Who Cares About Shareholders? Arbitrage-Proofing Mutual Funds. J Law, Economics and Organization (Oct. 2003); Zitzewitz E: How Widespread Is Late Trading in Mutual Funds? Stanford Graduate School of Business, Research Paper No. 1817 (Sept. 2003)), this misconduct accounts for an annual loss of approximately $5 billion a year due to the increased costs associated with market timing – quick trades to achieve short-term profits based on anticipated price swings — and $400 million a year due to late trading — an illegal practice allowing investors to buy or sell mutual fund shares at the fund's previously established net asset value (NAV) rather than the next day's NAV price.
Employee retirement plans subject to ERISA constitute a significant segment of the long-term investor community potentially harmed by late trading and market timing practices, raising the important issue of what fiduciaries who administer ERISA retirement plans must now do in the face of widespread mutual fund scandals. This article summarizes the steps that should be taken by trustees, investment committee members, and other fiduciaries of retirement plans governed by the Employee Retirement Income Security Act of 1974 (ERISA).
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.