He declined to name the firms. Soon the SEC also plans to issue a legal bulletin to remind fund companies that performance information, even if true, can be deceptive. A fund that technically complies with the SEC's advertising rule can still violate antifraud prohibitions. Others have the same concern. An investor who is seduced by attractive recent returns, he said, ultimately will get burned.
People call up and ask for the hottest fund of the moment and they have no idea what it does.
It's really sad because they think they have a fund that's going to ride a trend forever. It just doesn't happen.