In other news, investors in the Reserve Fund, which gained notoriety in 2008 when it became the first consumer money market fund to "break the buck" and incur a fall in its share price (normally stable at one dollar), are facing a new indignity. Not only did investors lose money and have their accounts frozen, the fund has announced it will use investors' money to pay its legal fees if investors sue the company and its managers.
In other words, if investors stop suing, the Reserve Fund will pay out 98.5 cents per dollar invested, according to the fund's plan of liquidation. Otherwise, the fund says, its investors may end up receiving less money because the company plans to use investor funds to defend itself.
Yep, investors are discovering that suing the fund means they are actually suing themselves.
This astonishing development has many investors wondering how they can ever trust the retail mutual fund industry again.