Court Overturns SEC Rules on Mutual Funds

Court Overturns SEC Rules on Mutual Funds
By MARCY GORDON, AP Business Writer
Friday, April 7, 2006
(04-07) 13:22 PDT WASHINGTON (AP) --

Rules governing the mutual fund industry, designed to protect investors from abuses, were overturned by a federal appeals court Friday and sent back to the Securities and Exchange Commission for the second time in less than a year.

In a 3-0 ruling, the U.S. Court of Appeals for the District of Columbia Circuit decided to void the SEC regulations mandating that chairmen of mutual funds be independent from the companies managing the funds. The court said the agency violated the Administrative Procedures Act by failing to adequately examine the potential costs to the mutual fund industry before adopting the rules, which require that at least 75 percent of the directors on fund boards be independent — up from the current mandatory minimum of 50 percent.

The court also decided, however, to hold off for 90 days on invalidating the rules to give the SEC another chance to make its case after opening the proposals to public comment a second time to garner better information about the costs.

SEC Chairman Christopher Cox said the agency "will comply with the court's decision in every respect."
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http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2006/04/07/financial/f132240D48.DTL

"failing to adequately examine the potential costs to the mutual fund industry before adopting the rules"

fund industry". There are people who make profits off the business of setting up, finding investors for and maintaining mutual funds.

Thus, their eagerness to get their mitts on Social Security Payroll Tax revenues.