For most individual investors, mutual funds represent the best vehicle for wealth creation. However, recent revelations suggest that many investors have been exploited for the benefit of others. Special arrangements between some fund managers and large investors--allowing certain customers to engage in market timing and late trading--have prompted large-scale litigation and demands for increased regulation of the industry.

This event will explore the theoretical foundations of this scandal, the empirical evidence of harm to investors, and the wisdom of regulatory intervention. In the first panel, finance scholars will present innovative research, which attempts to quantify the effects of late trading, market timing, and other practices such as soft-dollar brokerage arrangements and mutual fund fee dispersion. To provide a context for this academic research, the second panel will feature a discussion among individuals involved in mutual fund litigation.