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Patents & Updates

  • Mutual Fund Business Model Patent


On November 8, 2011, Litman Law obtained U.S. Patent No. 8,055, 571 for Sacks Equalization Model, Inc., a Boynton Beach, Florida based company. The patent is for a business model developed by retired stockbroker Seymour Sacks. The investment model ( called the Sacks Equalization Model relates to a business method designed to provide fairness in the mutual fund investment field. The model takes into account net value (NAV) of the mutual fund and accumulated stock brokerage fees. The accumulated commission fees are added to the net asset value per share prior to purchase of shares and subtracted from the net asset value per share prior to the liquidation of the shares. These monies flow back into the fund for the benefit of all shareholders. The model protects the asset value of mutual funds from the negative effect of rapid liquidations and reduces operating costs, making mutual funds more profitable per year.  Professors Miles Livingston of the University of Florida and David Rakowski of Southern Illinois University Carbondale discuss the model in their research paper, "A New Method For Computing Mutual Fund NAV In Light Of Liquidity-Induced Transaction Costs."