Fidelity Investments' top investment executive expressed shock at recent revelations about securities firms' misbehavior, yet urged the industry to help the investing public not to lose complete faith in the system, The Wall Street Journal reports.
"Clearly, the bubble years of the late 90s saw a lot of egregious behavior that had to be reined in," said Abigail P. Johnson, president of Fidelity Investment Management & Research, referring to this weeks global research settlement by 10 Wall Street firms. But, she said, the mutual-fund industry must make sure that investors dont give in to "excessive caution when the markets head south" by abandoning the equities market.
These comments come at a time when investor confidence is at a low, amidst a three-year bear market. Specifically, Fidelity's managed assets are down from a peak of more than $1 trillion in 2000 to $799.8 billion as of March 31, mostly because of the declining market, according to the Journal.
Johnson is widely viewed as the heir apparent to her father, Edward C. Johnson III, the 72-year-old chairman and chief executive of closely held Fidelity, the nation's largest mutual fund firm. Analysts recently valued Boston-based Fidelity, also known as FMR Corp., at up to $20 billion, with the Johnson family owning about half the firm.