The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Streetwise: A scandal waiting to happen

The biggest ever mutual fund scandal is staring us in the face, reckons Henry Blodget. All that is needed is for an aggressive prosecutor to capitalize on the obvious.

Henry Blodget

ONE OF THE morals of recent financial scandals is that companies can no longer rely on industry regulators to determine what is or isn't okay. Aggressive prosecutors have not only cited infractions of existing laws – late-trading, bid-rigging, for example – but have also criminalized industry practices that have been rubber-stamped by regulators for years. Whether such practices are regarded as illegal or should be so regarded is almost beside the point. Allegations can be as damaging as convictions, so careful companies must comply not only with today's precedents but also tomorrow's.

Bear markets for stocks are bull markets for regulation, and this one might last a while. So even as fund companies lick wounds from late-trading and market-timing allegations, they should consider what's likely to hit next.

A loser's game

Academics have essentially proved that active fund management, for the fund customer, is a loser's game.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree