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Opt-In Stewardship: Toward An Optimal Delegation Of Mutual Fund Voting Authority, Sean J. Griffith
Opt-In Stewardship: Toward An Optimal Delegation Of Mutual Fund Voting Authority, Sean J. Griffith
Faculty Scholarship
This article offers a theory of mutual fund voting to answer when mutual funds should vote on behalf of their investors and when they should not. It argues that voting authority for mutual funds ought to depend upon: (1) whether the fund possesses a comparative information advantage, and (2) the ability of the fund to assume a common investor purpose. The strongest case for mutual fund voting is one in which high-quality information is produced and the fund is able to assume a common investor purpose. The case for mutual fund voting is weaker when low quality information is produced …
Toward A Mission Statement For Mutual Funds In Shareholder Litigation, Sean J. Griffith, Dorothy Lund
Toward A Mission Statement For Mutual Funds In Shareholder Litigation, Sean J. Griffith, Dorothy Lund
Faculty Scholarship
This paper analyzes the conduct of mutual funds in shareholder litigation. We begin by reviewing the basic forms of shareholder litigation and the benefits such claims might offer mutual fund investors. We then investigate, though an in-depth docket review, whether and how the ten largest mutual funds participate in shareholder litigation. We find that although shareholder suits offer potential benefits, the largest mutual funds have essentially forfeited their use of litigation. This finding is particularly striking given that index funds and other long-term oriented mutual funds generally cannot sell their shares when they are dissatisfied with company performance, leaving them …