Boards of directors at mutual funds engaging in illegal trading should be reviewed and if necessary, changed, former U.S. Securities and Exchange Commission Chairman Arthur Levitt said, according to a Reuters report.

Appointing an "ombudsman" to perform self-criticism, as many newspapers do, would be in the best interest of many fund boards currently under scrutiny, Levitt said. If the fund is found to have traded illegally, Levitt had a more drastic idea.

"I have questions about whether the board itself should not resign," Levitt told Reuters. Amid the turmoil caused by New York Attorney General Eliot Spitzer’s probe into the $7 trillion fund industry, Levitt suggested some other changes as well.

He pointed to the independent director position, one he did concede can be effective in checks and balances, as an area in need of change. Saying that many of the directors often serve for more than 20 years, are in their 70s and are on the boards of a dozen or more funds, he placed the onus on the boards themselves to make crucial membership decisions rather than regulators. "That’s something the boards themselves are going to have to determine," said the 72-year old Levitt.

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The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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