Mutual funds were supposed to be a safe and easy way to make money. At least that’s what 95 million Americans thought when they put $7 trillion of their hard earned money into them. Safer than stocks, more profitable than bonds, mutual funds offered a way for ordinary investors to benefit from the expertise and experience of fund managers who were supposed to have their interests at heart.
But now the managers of some of the country’s biggest mutual funds are being charged with trading in ways that enriched the few at the expense of the many. From Putnam Investments last week, to Prudential Securities yesterday, to Alliance Capital this morning, top executives are losing their jobs and investors are wondering if they will lose more money.
Guests:
Paul Roye, Director, Division of Investment Management , U.S. Securities and Exchange Commission
Gary Gensler, former Under Secretary for Domestic Finance, U.S. Treasury
Ian McDonald, financial reporter for The Wall Street Journal.