USA: CAPITALISM

WsWs: US mutual fund industry hit by fraud scandal

The latest scandal to hit Wall Street and corporate America centers on
the mutual fund industry. Several mutual fund firms, investment banks and
hedge funds have been implicated in “market timing” and illegal late trading
of mutual fund shares. These practices have benefited an elite group of
investors and fund managers at the expense of millions of small
investors.

The US Securities and Exchange Commission (SEC) and state regulators in
New York and Massachusetts have brought charges against such firms as the
mutual fund giant Putnam Investments, the brokerage firm Prudential
Securities and a series of smaller mutual fund companies. Individual
brokers and executives at some of these firms are facing criminal
charges, while the mutual funds themselves face civil fraud charges.