Whose looking out for you?

When selecting an advisor, broker or online trading company, conventional wisdom is to use a large, publicly held, brand name investment firm. Like most things in investing, the conventional wisdom is wrong. These firms have conflicting interests, and the individual investor suffers.

Investment companies in the news

The mutual fund industry operates on a double standard. Certain companies and individuals have been given the opportunity to manipulate the system. They make illegal after-hours trades and improperly exploit market swings in ways that harm ordinary long-term investors.

Merrill Lynch's investment advice tainted by conflicts of interest. A core issue was whether or not analysts were being truthful and fair...

ING had made payments of as much as $3 million per year as inducement to endorse and promote ING group annuity plans with biased investment advice. ING will also pay $30 million.

Prudential Equity Group investigation revealed that the company’s brokers defrauded at least 50 mutual funds and their investors and will pay $270 million in restitution to injured investors.... [and ] a penalty of $330 million.

Waddell & Reed permitted illegal trading of its funds, agreed to pay $50 million in restitution to investors and make fee reductions totaling $25 million over the next five years.

H&R Block Company steered hundreds of thousands of customers into IRAs with hidden fees and low interest rates. "In addition to designing a flawed product with hidden fees and marketing it fraudulently to unsuspecting customers, senior management steam-rolled conscientious employees who objected to the fact that clients were losing money."

Founders of PBHG, a leading mutual fund family, personally pay more than $120 million in restitution to investors and accept a lifetime ban from the securities industry.

Robertson Stevens managers and executives knew that arrangements with market timers were contrary to claims made in the company's prospectus and harmful to long-term investors.

Invesco Funds Group will pay damages of $215 million and a penalty of $110 million for entering into "special situations" resulting in billions of dollars of rapid-fire transactions which damaged typical long-term investors.

Banc One investigation found that preferred investors were allowed to engage in improper, frequent short-term trading of Banc One mutual funds while diluting the funds’ returns to shareholders and has agreed to pay $10 million in restitution.

MFS, the nation's 10th largest mutual fund retailer to resolve charges that the company permitted certain customers to engage in improper trading activity that cost typical investors at least $175 million.

Putnam mutual funds' fee structure has benefitted management companies at the expense of investors.