Houston's Clear Thinkers

Seligman contends in its lawsuit that that the Securities and Exchange Commission has the exclusive authority to regulate advisory fees and, thus, Mr. Spitzer's office does not have the authority to pursue the investigation. The Aspiring Governor ratched up the pressure on Seligman when he utilized his usual tactic when a target company does not roll over and enter into a settlement -- he issued a flurry of subpoenas for documents involving fee negotiations between the firm and the independent directors of the Seligman Funds dating back to 1998. Mr. Spitzer's assault on Seligman is an offshoot of his 2003 campaign against the mutual fund industry in which he alleged fund companies allowed favored investors to make improper trades at the expense of long-term shareholders. In connection with prior settlements, about a dozen fund companies have cut advisory fees by an aggregate amount of almost a billion in addition to paying fines and other penalties.

Incredibly, Mr. Spitzer's office does not understand why Seligman isn't simply playing ball with the Aspiring Governor just like all the other fund companies that have rolled over under pressure. A spokesman for Mr. Spitzer's office was actually quoted as saying he could not understand why Seligman shouldn't "want to join other mutual-fund families making appropriate restitution and reducing inordinately high fees?"

Answer: Maybe because it's none of your business.