Charles Schwab Corp.s CEO David Pottruck said on Thursday that he expects the scandal engulfing the fund industry to grow even deeper.
"There will continue to be new investigations and new revelations," he said, Reuters reports. "There are still things to find in this industry." While declining to elaborate on his statements, Pottruck said the industry still employs questionable practices.
Schwab has previously announced that it received subpoenas from New York Attorney General Eliot Spitzers office and that the SEC was looking into the firms trading practices, including potential late trading.
There has been talk that the scandal is cooling off, speculation that fueled in part by remarks by Spitzer. However, many have speculated that mutual fund firms on the West coast may be the targets in the next wave of prosecutions. Also, regulators are expected to shift their focus to practices other than market timing and late trading. Directed brokerage is likely one of the main areas likely to b scrutinized by federal regulators going forward.