Paul Roye, former top mutual fund regulator at the Securities and Exchange Commission ended months of speculation last week by announcing that he's going to work for mutual fund giant Capital Research & Management.

Roye, who stepped down in February as director of the SEC's division of investment management, will serve as senior vice president in the Los Angeles-based firm's fund management unit, effective today.

The 51-year-old Dartmouth College and University of Michigan Law School graduate will report to Paul Haaga, Capital's executive vice president. Capital oversees American Funds, the nation's second-largest fund complex with $671.8 billion in assets in 29 mutual funds.

Roye will reportedly work closely with the company's legal and compliance staff, and will also spend a lot of time with its independent directors and outside counsel on fund regulations, according to published reports.

Roye led the division of investment management through a tumultuous period marred by a pervasive trading scandal involving top executives of the $8 trillion fund industry, hedge funds and the broker-dealer community.

In a recent interview with MME, Roye said he thinks the SEC has placed funds in a position to avoid a repeat of the problems that led to the scandal.

"We've tried to enhance the independence of the boards, tried to focus on the compliance infrastructure code of ethics requirements - those things designed to raise the standards of the industry. Now [it's the fund industry's] turn to step up and implement what the Commission has laid out and make it real, make it work. And then they have to look for areas where there are conflicts of interest, where there might be problems, where the likely breakdowns might occur and just try to be vigilant."

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