"If the discovery of abuses within our own industry did not teach us important lessons about our responsibilities to fund investors, the scandal will not really have ended," Haaga told a room of ICI members in his opening remarks at the Institute's 2004 General Membership Meeting in Washington, D.C.
Calling the scandal a series of "criminal acts," "civil frauds," "serious ethical transgressions," and "egregious" management mistakes, Haaga quoted former U.S. President Abraham Lincoln about the need for the industry not to be "content with [its] failure." Fund executives must be satisfied that they adequately learned from the lapses in the fund industry.
Haaga also told members to remember that the scandal became front-page news only because of the clean image the fund industry had possessed before New York State Attorney General Eliot Spitzer's initial findings in September. Haaga presented what he called "first principles" for the industry, again going back to shareholders.
"Simply stated, if managers do not put their shareholders first, mutual funds will no longer be the investment of choice for 95 million Americans," Haaga said. "And we will no longer deserve to be."
