A photograph of an aging Walt Whitman, the subject of Bullard’s Yale thesis as an English lit major, stands watch above his desk. Artwork by his three children, along with a Georgia O’Keeffe print, hangs nearby. And scattered throughout are framed copies of articles chronicling the 42-year-old Bullard’s growing influence as founder of Fund Democracy, an industry watchdog group he founded in 2000.

That influence has been on display ever since the fund scandals started appearing on the front pages of mainstream newspapers. But make no mistake, Bullard is no Johnny-come-lately when it comes to influencing change in the fund industry. Ever since launching Fund Democracy, Bullard has shown he can pressure regulators and fund groups to alter the way they do business.

Now, amid the burgeoning scandals and resulting cries for reform, he is playing a key role in shaping pending changes in the industry.

“This is the biggest opportunity I may see in my lifetime to accomplish significant mutual fund reform,” says Bullard, who is an assistant professor at the University of Mississippi School of Law. “My focus is first, teaching my classes and second, to get good laws made that will serve mutual fund shareholders.”

Bullard’s aim is both to help curb the current trading abuses and to address broader problems in the fund industry.

His zeal for reforming the fund industry comes from his conviction that the industry’s health may soon become crucial to nearly every American. If Social Security is privatized as some predict and as the president has said he intends partially to do, assets could pour into mutual funds like never before, says Bullard. And if those products are tainted, it may well spell disaster for millions of retirees, he says.

His crusade began in 2000, when he left the SEC to start Fund Democracy. At the time, many ridiculed Bullard for passing up the generous salary of a fund lawyer to fight for needless changes in a pristine corner of the financial services industry.

But Bullard managed to silence many of his detractors in May 2000 when he successfully pressured Barclays Global Investors to add disclosure on a series of exchange-traded funds.

Bullard, who at the time worked as a one-man operation out of his basement, brought Barclays plans for the new ETFs to a screeching halt by filing a complaint with the SEC and requesting a hearing with the regulator. That could have stalled the launch of the ETFs for months, costing Barclays millions in lost revenues.

Rather than fight Bullard and the Consumer Federation of America, which filed the complaint with Bullard, Barclays decided to acquiesce to their demands. It added disclosure to the funds’ prospectuses, its website and annual report noting that the funds often trade at a premium or discount to their net asset value.

Bullard also won another partial victory in 2001, when he raised issues about the SEC’s process of granting exemptions to funds seeking permission to replace subadvisors without shareholder approval. Again, Bullard filed for a hearing with the SEC on the matter, halting the flow of the regularly requested exemptions for over two months. Although the SEC denied Bullard’s request, he managed to create a regulatory pile-up at the SEC, further establishing himself as a force to be reckoned with in the industry.

Bullard’s lobbying has contributed to the passage of the fund names rule, which requires mutual funds to hold at least 85% of their assets in the securities implied by their name. He also fought successfully for pay parity for SEC staff and expanded disclosure of funds’ portfolio holdings. The former has been enacted and the latter is being more seriously considered in the wake of the scandal.

Of course, Bullard’s tactics in bringing about change have earned him few friends in the fund industry.

Before the fund scandal began, Bullard was seen by some as a rabble-rouser with little constructive impact on the industry.

Financial Research Corp. president Neil Bathon says that Bullard has never worked at a mutual fund company. As a result, his recommendations often aren’t based upon practical knowledge of what’s feasible and what isn’t, he says.

And one industry attorney says that Bullard can sometimes be abrasive.

“Mercer’s rhetoric against the industry is quite sharp,” he says. “He attacks people more than he should.”

But the attorney also admits that for the most part, Bullard is on point and is what the industry needs right now.

That has put him in demand by lawmakers and fund industry heavyweights who are seeking him out both to tap his expertise and sway his opinion in the rulemaking sessions that lie ahead.

“I get calls from the SEC and the Investment Company Institute all the time,” Bullard says.

At the end of January, industry leaders including Shearman & Sterling partner Barry Barbash, Vanguard founder John Bogle, ICI executive vice president Paul Haaga , Morningstar managing director Don Phillips, House Committee on Financial Services senior counsel Linda Rich and SEC division of investment management director Paul Roye will convene in sleepy Oxford, Miss., to attend the Mutual Fund Summit, a brainstorming powwow spearheaded by Bullard to build consensus on reform.

But Bullard has more than just industry insiders watching him. To be sure, his influence can be seen in the legislation being floated on the Hill. For instance, Bullard, in coordination with a series of consumer rights groups, first introduced the idea of a mutual fund oversight board similar to the Public Company Accounting Oversight Board. That idea found its way into a mutual fund bill sponsored in November by Senator John Kerry (D-Mass.). Bullard was also an early advocate of requiring funds to have independent boards, lobbying for it soon after he launched Fund Democracy. That’s now one of the key issues being debated, and the Baker bill passed the House with a provision mandating independent board chairmen.

Meanwhile, Bullard is making the most of his newfound popularity and is taking measures to increase Fund Democracy’s power and influence. The organization has been ramping up its efforts in the past year. For starters it’s begun teaming up with consumer action groups, with Bullard adding his legal expertise in fund products to their political clout.

A number of new members, including the AFL-CIO, U.S. Public Interest Research Group, Financial Planning Association, Consumer’s Union and National Association of Investors, have signed on with Fund Democracy.

Their participation allows Bullard to claim that he’s speaking for a broad swath of mutual fund investors when he submits rulemaking petitions to the SEC and campaigns for changes. In return for their $25 annual membership fee, the groups gain access to Bullard’s depth of knowledge on fund legal issues.

The rate is nominal because using membership to fund operations isn’t a goal for Bullard. Instead, he selects members because of their clout with consumers. The fee is merely a formality to give the group legal standing.

“People like Mercer are few and far between in financial services,” says Dennis Genord, manager of mutual funds for the National Association of Investors. “He’s close to the environment. He’s worked with the SEC and he’s very passionate about different areas of reform. He’s not just a paper-pusher. He gets things done.”

Bullard’s early cry for industry reform also helps his credibility.

“He pointed out early on that while mutual funds were better than the rest of the [financial services] industry, there were still lots of ways that small investors didn’t get the treatment they should,” says Sally Greenberg, general counsel of the Consumer’s Union. “No one was interested until Eliot Spitzer began exploring industry practices. But Mercer was one of the first people that came to us and said we should be looking at these things.”

In addition to the broader representation, Bullard benefits from Fund Democracy’s status as a membership-based organization in another important way. He is now able to sue the SEC if he wants. That’s because the organizational structure gives him legal standing. He’ll use that in the near future, he says, to sue the SEC for not finalizing a broker-dealer rule it proposed four years ago.

One of Bullard’s key tools in bringing about change on mutual fund issues, however, has been his use of the media.

In addition to authoring a series of articles for TheStreet.com over the years, Bullard has been extensively quoted in a range of well-known publications. That’s raised Bullard’s profile while calling attention to the changes he’s championed.

“The SEC is just starting to realize that the press is the forum in which all of these rules will be decided,” Bullard says.

The media exposure may have raised his profile, but it also subjected him to the scorn of many in the industry who felt that Bullard was using the public spotlight to unfairly bash the industry. But Bullard says he deliberately picked issues he believed he could win.

That kind of strategic thinking has been a hallmark of his career in the fund industry. It’s what drove him to law school after a postgraduate position as a defense industry analyst. At the time, Bullard had whittled his choices down to law school or business school, and finally decided that a legal career would offer greater intellectual satisfaction.

After law school, he took a position at Wilmer, Cutler & Pickering, the so-called lawyers’ lawyers. There, he worked with partner Marianne Smythe. The former division of investment management chief sparked Bullard’s interest in mutual fund regulation. After three years of counseling fund clients, Bullard decided he needed direct regulatory experience and moved to the SEC as associate counsel in the division of investment management.

During those years, Bullard noticed a conspicuous absence of true shareholder representation. That, coupled with huge growth in mutual fund assets and a bull market that seemed destined to come crashing down, led him to found Fund Democracy, he says.

But convictions and idealism go only so far. After starting Fund Democracy, Bullard says he had a crisis in faith as to whether or not the fund industry truly needed a watchdog. Then Spitzer made his announcement in September.

“Before the scandal, I was beginning to think the industry was too clean,” he says. “I was starting to look into banking and payday lending.”

That’s not to say Fund Democracy will only ever focus on funds.

“At some point, I may expand Fund Democracy into other financial services industries,” says Bullard. “But mutual funds will be at the core of our activities because that’s where the money is.”

And Bullard isn’t finished with his efforts to reform the fund industry, he says. There are a number of issues that continue to concern him. For now, Bullard appears to have his hands full with the industry’s pending reforms. The other issues will have to wait another day before appearing as framed stories on the walls of Bullard’s office.

Contact Alison Sahoo at asahoo@ignites.com