From: Harvey Reading
SEC Chairman Christopher Cox
Dear SEC Chairman Cox,
It is a sad story that laissez-faire capitalism has resulted in companies defaulting on defined-benefit pensions, and that people invest in the gambling casino known as the stock market. That is going to change in the not too distant future, as capitalism has once again shown its ugly, exploitative side, as it did in the 19th and early 20th centuries. People have had a bellyful of an economic system that benefits only the wealthy. That said, given current conditions where, like ignorant sheep, people are acting to invest in our corrupt and biased economic system, it is imperative that mutual fund managers be totally independent of the companies in which they invest the money of others. This is such a no-brainer.
Mutual funds are an increasingly important savings vehicle for tens of millions of working Americans like me. We are the owners of these funds and we bear the risks if they are dominated by self-interested insiders. We look to the Securities and Exchange Commission (SEC) to protect us. I am writing to express my strong support for the proposed rule requiring that mutual fund boards have an independent chairperson and at least 75 percent independent directors. These rules were among the most important reforms adopted by the SEC in the wake of the mutual fund trading and sales abuse scandals.
A recent study by AFSCME and The Corporate Library found mutual funds provide a rubber stamp for excessive management pay, supporting more than three-quarters of all management pay proposals. Ninety percent of institutional investors think the current system overpays executives. We need independent directors to stand up to the excesses of the money managers.
The Investment Company Act requires that mutual funds be managed in the interests of their shareholders. Requiring independent directors and chairpersons will help ensure this safeguard for the small investor, to make sure the little person gets a fair shake.