Authors: Alan R. Palmiter & Ahmed E. Taha
Source: Georgia Law Review [Vol 46:2]
Despite the fact that mutual funds’ past performance is not a good predictor of future returns, mutual fund companies routinely advertise the returns of their best funds. While the SEC requires certain warnings be attached to performance advertisements, current regulation is grossly inadequate. At least, the SEC should strengthen its currently-mandated warnings. Better yet, it could reinstate its prohibition of fund performance advertising altogether.