|
|
Making our mark
4/26/2008 5:16 PM
Corporate America has good reason to fear Madison County?
Ask lawyers for the Van Kampen Funds, currently sparring with Judge Nicholas Byron over whether he feels obliged to regulate the entire U.S. mutual fund industry.
Imagine that scenario: one county circuit judge reshaping an 8,000 company industry, one that manages $11.7 trillion in assets for Americans--that's trillion with a "t."
No wonder Madison County was, once again, singled out for criticism in the annual state-by-state Lawsuit Climate survey by the Institute for Legal Reform which owns this newspaper. Illinois ranks near the bottom (46th) in the 2008 version released last Wednesday, and Madison County gets much of the blame.
When asked where they like practicing law least, corporate attorneys didn't just say Illinois, but singled out Edwardsville.
That's where Judge Byron rules. If there's authority to be enforced, he's prepared to enforce it. Some say it helps if a lawyer he adores argues the manner of enforcement.
For years now Van Kampen, one of the larger mutual fund managers in America, has been caught in Madison County's limitless litigation web. The company and others like it, including Putnam Funds, Pacific Life, Artisan Funds, T. Rowe Price International, Janus Fund and Columbia Acorn Trust, stand accused by local plaintiff's lawyer Stephen Tillery of timing trades so as to cheat their clients.
Imagine that. In an industry where consumers literally have thousands of options, nobody is playing by the rules.
Byron admitted in court last month that, while he personally holds shares in mutual funds, he doesn't pay much attention to disclosure reports sent him, such as financial statements and prospectuses.
"I don't bother to read it," Byron said in court.
But he will consider making a landmark ruling on mutual fund investor ownership that helps Tillery's cases, one of historical proportions-- if upheld--for the industry.
Congress opined on suits like these thirteen years ago, when it passed the U.S. Private Securities Litigation Reform Act (PSLRA) with the expressed purpose of stopping them.
"Manipulation by class action lawyers of the clients they purportedly represent" had led to nuisance filings, targeting of deep-pocket defendants, and vexatious discovery requests, said a House Report.
The report said lawsuits were being used to injure "the entire U.S. economy."
Byron seems untroubled by the prospect. He and Tillery are too busy crafting solutions to America's many problems from his Madison County courtroom.
They ought to take heed from the Lawsuit Climate survey: America notices, and it doesn't like what it is seeing.
|
