Maybe the fund scandals really are entering the final stretch. Friday's Wall Street Journal Fund Track column provides some proof in the debate by running a piece on the logistical challenges of reimbursing harmed shareholders. It even states that the "next stage in the saga of the mutual-fund scandal of recent years is about to begin." If anyone knows the mind of Eliot Spitzer, it is the folks at the WSJ; they do, afterall, seem to have an inside pipeline to Spitzer's office.

This "second stage" (or is it the third?) involves the disbursement of some $2 billion in fines that the regulators have so far collected from fund firms that got caught up with market timers and late traders. The problem -- as everyone in the fund industry must know -- is that determining who should get what is a recordkeeping nightmare involving omnibus accounts and retirment plan administrators, as well as the everyday changes in shareholdings.

And considering the small likely payout for most investors the task hardly seems worth the trouble. According to the WSJ, the typical fund shareholder may receive just $10. Meanwhile, some settlement agreements even waive restitution payments of less than $10 since the cost of processing those payments would eat up the entire amount.

That low payout may even anger some shareholders who expected to receive more after seeing their account balance dwindle by as much as 30 percent to 50 percent in some cases. Of course, those losses were the result of the falling stock prices and not improper trading.

The paper notes that so far three significant restitution plans -- PBHG Funds, Columbia Funds and One Funds -- have been put forward for public comment, allowing the paper to take a look at the issues. In those three cases distributions could start by the end of this year.

Some sources told the paper that they are wondering why each fund firm is allowed to use a different formula to determine the restitution payments it will make to shareholders.

"Why are we reinventing the wheel every time there's a new distribution plan?" the paper quotes Sarah Miller, director in government relations at the American Bankers Association, as asking. The ABA also questioned the time frame for making the payments in a letter to the SEC last month. 

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