According to reports in the investment media, the recent $24.75 million settlement made by WorldCom's directors in the case brought against them by disgruntled investors has unnerved mutual fund managers, who fear that the trend towards holding individual officials personally responsible for events which occur in their company may spread to the mutual fund sector.
Speaking to Investment News on Monday, Morris Manning & Martin attorney, Ross Albert observed that the implications of the WorldCom case, combined with recent and pending SEC actions and class actions against mutual funds for improper trading activities have created a "hazardous environment" for mutual fund managers.
However, opinion is divided on the matter, with Marguerite Bateman of the Independent Directors Council telling the news service that although fund managers have "taken notice" of the WorldCom settlement, it hasn't been an "ongoing concern".
President of the Mutual Fund Directors Forum, Allan Mostoff supported this stance, observing this week that:
"I don't think (fund managers) have to be concerned about personal liability."
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