Hearing Called To Explore Mutual Fund Legislation

October 29, 2003 (PLANSPONSOR.com)—A hearing has been set for Nov. 4 to examine the allegations in the mutual fund trading scandal and the need for new legislation to address the alleged abuses in the $7-trillion industry, according to Bloomberg News.

>The hearing was called by Rep. Michael G. Oxley (R-Ohio), chairman of the House Financial Services Committee, and it will be led by Rep. Richard H. Baker (R-La.), as the House Financial Services subcommittee on capital markets. According to Baker, the recent allegations that show how the average investor has been affected by market timing prompted the hearing and raised questions about the effectiveness of current and proposed legislation, reported Bloomberg News.

>Witnesses at the hearing will include Securities and Exchange Commission (SEC) Enforcement Director Stephen M. Cutler, Massachusetts prosecutor William Galvin and New York Attorney General Eliot Spitzer

>The mutual fund investigation began in September when Spitzer began releasing information of alleged trading abuses related to Canary Capital Partners LLC.   The investigation has since grown to include approximately 80 firms, including Putnam Investments, Bank of America Corp., Janus Capital Group and Alliance Capital.

>In July, a bill written by Baker that required increased disclosure of mutual fund fees and the governing of mutual funds, passed the Financial Services Committee of the House.