The Good, Bad and Criminal Among Mutual Funds

There are 95 million mutual fund investors in America, and only one advocate for mutual fund shareholders: Mercer Bullard.

That may seem like a Promethean task, but the former Securities and Exchange Commission official has proven game. Since founding the not-for-profit Fund Democracy less than four years ago, Bullard has aggressively pursued unsavory practices in the mutual fund world with the fervor of a vengeful superhero.

Bullard's articles on potential market-timing abuses for TheStreet.com in 2000 helped lay the groundwork for the allegations of fund-trading abuses in September -- indeed, the articles merited a prominent citation in New York Attorney General Eliot Spitzer's complaint.

Bullard, who doubles as a securities law professor at the University of Mississippi at Oxford, has been popping up in an increasing number of stories about the mutual fund industry these days -- as a tireless advocate for fair, honest treatment of individual investors, at times criticizing the fund industry's attempts to clean up its act in the wake of the latest scandal. The fund world may find it comforting that there is only one Mercer Bullard.

However, as today's 10 Questions demonstrates, Bullard believes the fund industry has earned its stellar reputation as a responsible steward of investors' assets. He also gives the lion's share of the credit to his former boss, the SEC. In today's column, Bullard weighs in on the fund-industry scandal that began with allegations of market-timing abuses at Janus(JNS Quote) and Bank One's(ONE Quote) One Group Funds and Strong Funds, and late-trading abuses at Bank of America's(BAC Quote) Nations Funds. Read on to hear Bullard's thoughts on the good, bad and criminal of mutual funds -- including more scandalous behavior among funds, and the fund firms that he trusts with his money.

1. What is Fund Democracy, and what led you to start it?

I started in private practice working on SEC enforcement matters and moved to mutual-fund law in the 1990s. In 1996, I went to work for the SEC, where I found that there was very little input from shareholders regarding most issues relating to mutual funds regulation.