About Mark Sarro Areas of Expertise Qualifications Contact Privacy |
Dr. Sarro's recent experience involving the mutual fund industry includes: Late Trading and Market Timing Mark was the consulting expert to the Board of a national mutual fund complex under investigation by the SEC and the Office of the New York Attorney General regarding existence and effects of after-hours trading activity and short-term (so-called "market timing") trades in all of the company's retail mutual funds over a five-year period. Mark led the project and advised both the client and the testifying expert who presented the analysis to the SEC and NYAG. The project spanned more than two years and involved a detailed analysis of extensive trading data at the account level. Over the course of the project, Mark led the development of a complex analytical approach to identify and quantify purchases and redemptions by potential "market timers" and to calculate the corresponding dilution to buy-and-hold shareholders in the funds. For comparison, Mark also calculated dilution under different wildcard and arbitrage strategies, and under selected market conditions. The case settled following a presentation to the SEC and NYAG based on these analyses. Following the settlement, Mark led the transition of that analysis to the independent distribution consultants. Mutual Fund Fee-Setting On behalf of a national mutual fund complex, Mark led a large-scale analysis of the appropriateness of fees charged to mutual fund investors for investment management and related services. He advised the company and its outside counsel on the relevant measures of profitability, developed a sophisticated analytical framework to assess fund-level profitability, and advised both the client and the testifying expert through reports, depositions, and trial preparation. The case was dismissed prior to trial. Plaintiff shareholders in certain funds alleged the company earned "excessive profits" through its advisory fees. Mark led the project team that evaluated the profitability of the company and each of its business segments using a detailed accounting analysis at the fund-level which tracked all revenues and expenses from the company's ledger of accounts to each business segment and ultimately to each retail and institutional fund. The analysis incorporated specific cost allocation issues, as well as broader issues of business strategy, organization, economies of scale, and competitive market conditions. In a separate project, Mark was a consulting expert to plaintiff counsel for a class of shareholders pursuing an excessive fee case against a large mutual fund complex. He has advised counsel on the significance of case-specific facts and on the range of approaches available to calculate and evaluate fund-level profitability. He also reviewed and consulted regarding data and reports from both industry sources and testifying experts. |
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