Journal Article

Mutual funds in the Supreme Court

Fink, Matthew P

2011

Overview

Each time the US Supreme Court agrees to hear a case involving mutual funds, some of the author's colleagues in the fund industry worry that the Justices will not appreciate funds' unique characteristics and therefore will render a misguided decision. This article will review the cases involving mutual funds that have been decided to date by the Court. Each case, like all cases, presents many issues. This article focuses on just one question -- how well did the Court take into account the unusual attributes of mutual funds in formulating its decisions. In US v Cartwright, the Court examined a Treasury Department regulation providing that for estate tax purposes mutual fund shares are to be valued at their public offering price at the date of death. In US v NASD, the Justice Department brought suit against the National Association of Securities Dealers, mutual funds, fund underwriters and broker-dealers. The Court found that restrictions on activities by brokers were disclosed in registration statements and did not contravene any SEC rule.

• Publisher: Aspen Publishers, Inc
• Subject: Antitrust laws / Bank holding companies / Banking industry / Directors / Disclosure / Estate taxes / Federal court decisions / Federal regulation / Fiduciary responsibility / Investments / Litigation / Mutual fund industry / Mutual funds / Officials and employees / Regulation of financial institutions / Sales / SEC regulations / State court decisions / State laws / Stockholders / Supreme Court decisions