Mutual Funds Scandals

Mutual Funds Scandals. Almost half of all American families own shares in mutual funds. People very often put their money in mutual funds in IRAs or company pensions. However, during the past five years there have been so many mutual funds scandals spread, that a lot of investors started to think about withdrawal of their money. A lot of the leading investment companies have been involved in the wildfire. Nevertheless, the very largest investment companies such as the Vanguard Group and American Funds, had no relation to those scandals. Most of the scandals were focused on two problems: late trading and market timing. And the fraudulent companies were making money, while the investors were losing it. Almost twenty companies have been involved in those scandals and in fraudulent business tactics. The most notorious of those cases was the late trading scandal in which Canary Capital Partners LLC was involved. The company was accused of late trading that violates a number of laws and regulations. Canary Capital Partners LLC in collusion with many well-known mutual funds bilked investors: the company sold mutual fund shares when the market was officially closed at the price of the past day and could use all the necessary information they learned during the day. In such a way Canary Capital Partners and its partners could make huge profits that resulted in huge losses for shareholders. As a result of this situation, a number of nation known mutual fund companies had to pay fines and penalties to return to investors there money. And Canary Capital settled the case paying $40 million.