After months of upheaval at the Securities and Exchange
Commission (SEC), William Donaldson was finally appointed chairman
on February 18, becoming the 27th holder of the post. One of
Donaldson's first tasks will be to address the growing level of
concern about the investment management industry, which controls
$21 trillion in assets, including $6.6 trillion in mutual
funds.
In an atmosphere where US investors and politicians are
questioning many aspects of corporate culture and the financial
markets, there are fears over fund fraud, the increasing
retail-availability of hedge funds and the potential conflicts for
mutual funds managers that also operate hedge funds.
Donaldson's predecessor, Harvey Pitt, got the ball rolling, with
SEC staff having been involved in discussions with fund managers
about their practices since last summer. The SEC has already
responded to concerns over mutual funds by ordering them to
disclose how they cast proxy votes. Donaldson himself has already
expressed an interest...