The spate of allegations against mutual fund firms for abusive trading practices could have a dramatic effect on investor confidence, Henry Paulson, chairman and chief executive of Goldman Sachs said Monday.

"The mutual fund scandal in some ways is the most serious one of all because we have 94 million shareholders in mutual funds in the U.S., " Paulson said.

Subscribe Now

Access to premium content including in-depth coverage of mutual funds, hedge funds, 401(K)s, 529 plans, and more.

3-Week Free Trial

Insight and analysis into the management, marketing, operations and technology of the asset management industry.