MarketWatch columnist Chuck Jaffe portrays the $75,000 former Putnam CEO Lawrence Lasser paid to the Securities and Exchange Commission for permitting revenue sharing as a “wimpy, one-fingered slap on the wrist.” Given the fact that Lasser got a $78 million severance package and the firm paid his legal expenses, $75,000 is a meaningless drop in the bucket, Jaffe says. As long as regulators fail to properly punish wrongdoers, he predicts, scandals will continue to plague the industry.
“As a mutual fund shareholder, you wanted to believe there would be no more scandals, that the bad guys had been caught, would be punished and that the worst was over,” Jaffe writes. “You’d have been better off believing in the Tooth Fairy.”
Mercer Bullard, founder of Fund Democracy, agrees: “There are some ‘everyone-is-doing it’ abuses that no one seems to be really getting punished for. There will always be another angle, at least until someone decides that hurting shareholders this way deserves real punishment.”