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From: Bernard Roth
SEC Chairman Christopher Cox Dear SEC Chairman Cox, 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. Another problem of lack of disclosure is that the source of money for mortgages, in many cases under-collateralized, or "100% financing", and the source of money for credit card borrowers are coming from mutual funds, pension funds and money markets, without the investors having an inkling that they, the investors, are lending to these precarious borrowers [not normal banks, controlled by State and Federal legislation. The practise must stop or be spotlighted by full disclosure in elementary language. As an investor in stocks I vote down boards and auditors who allow outrageous compensation, and join in on class action suits to stop these abuses. Fix it! Sincerely, bernard roth |