The mutual fund industry, while still viable and in position to bounce back, needs drastic changes and needs them now, Securities and Exchange Commission Chairman William H. Donaldson said in a sometimes scathing, sometimes positive speech.

"I am left with the conclusion that these [market timing and late trading] occurrences represent a fundamental betrayal of our nation's investors, and are symptomatic of a disease that has afflicted far too many in the industry," Donaldson 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.