NU Online News Service, May 21, 2004, 5:13 p.m. EDT – A powerful lawmaker has come out in favor of putting independent chairmen in charge of mutual fund families.[@@]

U.S. House Financial Services Committee Chairman Michael Oxley, R-Ohio, says he learned through his own research that 85% of the mutual fund families implicated in the recent fund scandals had management-affiliated chairmen during the time of the alleged violations.

Oxley has sent his research to the chairman and commissioners of the U.S. Securities and Exchange Commission and asked them to adopt a proposed rule that would require mutual fund companies to have independent chairmen.

Oxley says he looked at publicly available information for 19 companies that have been subject to settlements, charges or allegations of market-timing and late-day trading. Only 3 of those fund companies had independent chairmen during the periods involved in the enforcement actions, Oxley says.

When the same person serves as a fund company manager and a fund chairman, “the dual role creates too many opportunities for self-dealing for both personal and business gain,” Oxley says in a statement about the results of his study.