The once sleepy inner-sanctum of mutual fund boardrooms is under fire from New York Attorney General Eliot Spitzer and securities regulators who have a new mantra: trustees are accountable. Spitzer told a crowd attending a recent seminar in San Francisco organized by Kroll that mutual fund boards had "screwed up" and were due to have their fates linked with management officials who until now are primarily responsible for regulatory transgressions, TheStreet.com reports. Speaking to the Kroll seminar attendees, Spitzer said widespread malfeasance stemmed from a trend in which asset managers increasingly strived to maximize fees from smaller portfolios rather than safeguard shareholder' interests. Michael, Cherkasky, president and CEO of Kroll, echoed Spitzer's claims by drawing a parallel between systematic tolerance of improprieties on Wall Street and a breakdown of authority in the Los Angeles Police Department during the past decade. Both situations, Cherkasky said, were fueled by a lack of regulatory oversight. Spitzer reversed his earlier criticism of the Securities and Exchange Commission, praising the organization's recent efforts to strengthen oversight and tackle fundamental problems plaguing financial companies. As a result of combined efforts among regulators to root out corruption, the epidemic of market timing and late trading is beginning to show signs of subsiding, he said.

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