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Non-Tech : The ENRON Scandal
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To: Mephisto who started this subject11/20/2003 3:41:23 AM
From: Mephisto  Read Replies (1) of 5185
 


Take fraudulent bull by the horns

OUR VIEW
ajc.com


The rolling mutual fund corruption mess, which has drawn the names of a dozen
firms into the mire so far, has kicked up a swirl of investigations. And there is no
sign the probes have touched bottom. The scandal begs close and focused attention
from the Securities and Exchange Commission.

The public has grown to trust mutual funds and to entrust billions of dollars in them.
The majority of Americans who own stocks purchased them through an employee
401(k) plan or similar retirement savings account; many of those plans invest in
mutual funds -- mixtures of stocks or bonds or both.

But the public is now on edge at the daily news about yet another turn in trading
irregularities that allowed some operators to skim the funds, enriching themselves
while cheating the small investors. While a number of executives have been fired
and fines have been levied, not enough has been done.

The settlement of the complaint against Putnam Investments seemed premature; it
was made well before all the facts had been obtained. An explanation by
commissioners that action was required because panicking investors were fleeing
Putnam sounds weak at first blush -- except that the outflow was estimated at a
whopping $14 billion, a situation crying out for stabilizing action.

But the only action that can truly stabilize this sector of the financial community is
to see the federal investigators fully engaged and moving toward reforms that
reassure investors. So it behooves SEC Chairman William Donaldson to be less
defensive and more aggressive in moving toward those needed reforms.
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