Mutual funds get hurt each time a crisis hits capital markets. Who needs a reminder that $525 billion has been pulled from stock funds since the start of 2007? Yet, each time a crisis arrives, the stunning part too often is how few checks and balances there are in place.

Take the London Interbank Offered Rate scandal.

Do you mean to say Barclays can't produce, on demand, a recording of the conversation between shelved chief executive Robert Diamond and Paul Tucker, the deputy governor of the Bank of England? Or the conversation between Diamond and former chief operating officer Jerry Del Messier, that Del Messier took as instruction-authorized by the Bank of England-to lower what Barclays said it was paying for interbank loans?

Heck, if you're an employee, you expect Diamond or Del Messier or whomever is in charge can read your email and listen in on your conversations.

Soon, any conversations traders have with customers or each other will be recorded, whether it's from a turret at their desks or an iPhone on the go. The United Kingdom has been at the forefront of this. And firms like IPC are making it routine to record conversations or messages on any device, pretty much anywhere.

Why should CEOs be exceptions?

Then there's the Peregrine affair. the Commodities Futures Trading Commission is (again) apologizing for being unable to forestall an egregious misappropriation of customer funds. Have we forgotten MF Global (the Jon Corzine-led customer abuser) so quickly? How can $200 million of customer funds be missing (again)?

CFTC commissioner Scott O'Malia is now calling for automated alerts on any kind of unauthorized movement of customer funds. Good start.

But want to make sure a Bernie Madoff minion or a Corzine-driven would-be investment banker doesn't make off with customer funds?

Insist on separate omnibus bank accounts for customer funds and investment manager funds. At different banks, even.

Insist on daily reporting of all transactions conducted on behalf of customers, from the investment manager.

Insist on daily reporting of balances on hand for those customers, from the bank holding the assets.

See how they square.

Write an algorithm or two, to check one against the other. Not too hard.

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