Dean Calls for Measures to Restore Trust in Mutual Fund Industry

[Khephra]

Dean Calls for Measures to Restore Trust in Mutual Fund Industry

BURLINGTON--Democratic presidential candidate Governor Howard Dean, M.D., applauded the vote by Securities and Exchange Commission to stop illegal mutual fund trading after the market’s close and called for much more far-reaching reforms.

"The mutual fund scandals are only the latest example of the betrayal of the public trust in our economic system. The thread of that betrayal begins with the deceptions of Ken Lay and Enron, extends through the abuses by some mutual fund executives, and runs right up to the very top, to a President who used budget gimmicks and fuzzy accounting to justify his reckless and irresponsible tax cuts," Governor Dean said.

"We need a return to ethical business practices," Dean said. Governor Dean called on Congress to adopt the following measures:

Require mutual fund boards to have a majority of independent directors, including the chairman.
Amend the Investment Company Act of 1940 to state that boards have a fiduciary duty to act in the interest of investors.
Require mutual funds to report all managerial compensation in a transparent way.
Mandate a simple, uniform system of reporting of all fees charged by mutual funds.

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