WASHINGTON (HedgeWorld.com)–In response to persistent reports of market timing and late trading at mutual fund companies, U.S. House and Senate subcommittees are planning separate hearings Nov. 3 and 4.
The Senate’s Financial Management subcommittee will hold a hearing Nov. 3 at 10:30 a.m. EST. Among the witnesses called to testify are New York State Attorney General Eliot Spitzer; Stephen M. Cutler, director of the Division of Enforcement for the U.S. Securities and Exchange Commission; and Rep. Richard H. Baker, R-La., chairman of the House Capital Markets subcommittee.
Mr. Baker and his House subcommittee will conduct their own hearing Nov. 4 at 10 a.m. Included on that list of witnesses are Mr. Spitzer, Mr. Cutler and William Galvin, Secretary of the Commonwealth of Massachusetts.
Both hearings are meant to delve more deeply into mutual fund trading practices to determine whether further industry regulation is needed to protect investors.
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In a statement announcing the House hearing, Rep. Baker said that since July, when the House Financial Services Committee sent to the full House a bill designed to improve transparency of mutual fund fees and cost structures and increase corporate governance, “a number of extremely disturbing revelations” about mutual fund trading practices have come to light.
“Subcommittee members have a serious responsibility to get the facts about these particular incidents of late trading and market timing,” Rep. Baker said, and to then ask “whether our proposed legislative reforms for mutual funds go far enough.”
The Senate subcommittee’s hearing announcement notes that the purpose of the hearing is to “explore the extent and impact of alleged trading abuses … and consider regulatory reforms necessary to mitigate such practices in the future.”
Other witnesses who have been called to the Senate subcommittee’s hearing include Mary L. Schapiro, vice chairman and president of regulatory policy and oversight for the National Association of Securities Dealers, Washington; John C. Bogle, founder and former chief executive officer of The Vanguard Group, Malvern, Pa.; and Paul G. Haaga Jr., chairman of the Investment Company Institute, Washington.
The House subcommittee’s full witness list is expected to be released Friday or Monday, subcommittee spokeswoman Brookly McLaughlin said.