Mutual Fund Losses May be the Result of Negligence

Minneapolis, MNBruce P (not his real name) is angry about his mutual funds. He says they have not been managed in the way they should have been, causing them to drop in value and allowing someone unauthorized to withdraw funds. Bruce's mutual fund losses may be the result of someone's negligence and not the result of normal market fluctuations. Luckily, there may be action Bruce can take to recover lost funds.

Bruce says that he has had the mutual funds for between 10 and 15 years. He has 4 mutual fund accounts all with the same company. However, he says that when the company in charge of his mutual funds changed hands, he experienced problems with his funds, including a loss in their value.

"The original account executive was a friend of the family," Bruce says. "I don't know what happened to him. Every time I complain about my mutual funds I get a new account executive in a new location. That didn't matter to me at first because the funds were producing. But, then they started not producing and the balance sheet was not matching up with published information.

"Whenever I bring up my complaints they tell me they'll check into it and it's important to them, but they are not giving me a formal, legal response.

"When the company changed hands my mutual funds drastically reduced in value. This was before the recent economic problems. Thhe account executive tells me about the mutual fund manager and the fund is in their control because I trust them."

A serious issue that Bruce has with his account is that money was withdrawn without his authorization.

"One inquiry I'm asking about is a check that was issued from a mutual fund for $8,000. I want to know who asked for the check—who got it. My name is on there, but we don't know where the $8,000 is. I didn't authorize that."

Bruce says there are a number of problems with his mutual funds, issues for which he has not received a satisfactory response. One is that at least the one unauthorized check was written from his account. And although Bruce admits the money could have been taken by the IRS, he has not received a proper accounting for who took the money and no reason for why the money was taken.

Another issue is that Bruce's mutual funds are not performing nearly as well as he was told they would and the company failed to move his money when the funds stopped producing.

"The mutual fund was promoted as being a great producer and then stopped, but they didn't move the money," Bruce says. "I questioned it but I was not given an adequate response. There has been no changing of my money to a more productive account and no rationale for the losses. All this happened before the recent change in economic conditions.

"My issues have never been resolved. The funds were never returned to my account, they did not go after the funds that were taken and they did not provide any concrete evidence that the accounts produced what they were supposed to. Now, I got my last statement and there's another drastic reduction to one of my accounts.

"Any transaction on accounts in my name should have been authorized by me or in trust for me. The fact is, they said they would check into what happened but they have taken no action and have not restored my accounts."