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Wednesday, September 17, 2003

Spitzer Interview

Business Week's interview with the NY AG shows Eliot Spitzer taking a relatively non-alarmist approach to the new mutual fund issues he's uncovering:

"Investors shouldn't run from the mutual-fund industry because of this. What they should do is demand that their mutual-fund families change their practices with respect to late-day trading and market-timers."

Another article on BW online similarly suggests investors should not sell out their mutual fund shares based on the investigations. In this they differ with Morningstar, the Chicago MF info giant, which recommended selling the funds under investigation last week.

Spitzer also sounds a conciliatory note toward the Bush administration's SEC:

"...any notion that there's tension between our offices or an inability to cooperate isn't accurate. We want folks to understand not only do we get along but we also intend to fully cooperate on our mission to protect investors."

While I'm on the topic of Wall Street, I'll remark that Dick Grasso's departure is well deserved. He was voted a huge pay package by the executives whose companies he was supposedly regulating, which is a blatant no-no in the post-Enron environment. He began to be richly overcompensated back a few years ago when no one paid attention to such things. But he should've realized his own raiding of the cookie jar would spark ire among outside observers after what's gone down in the last year-plus. He tried to give back a chunk of money (too small a chuck at that) too late to save his job.