The saga of the reserve fund has certainly been ugly. It was one of the relatively few money funds that actually broke the buck, which ignited a near-panic in the industry in September. It certainly was pivotal in forcing the Fed to announce a money fund protection program. But in the inevitable litigation that has broken out, some scandalous charges have emerged; notably that fund officials tipped off some big customers ahead of the announcement that it had suffered the massive losses, reports the New York Times. The charges are that they wanted to let preferred customers redeem at full value. Plaintiffs now are asking a judge to release audio tapes of phone calls from employees to customers the day before the big news broke. If the allegations are true, it would be very scandalous--yet another black eye for the industry.

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