Some Wall Street executives have been breathing a sigh of relief that New York Attorney General Eliot Spitzer is going to run for governor. But if he does move on, will that mean a more relaxed stance at the SEC?
Many in the industry think not. Having been repeatedly upstaged by the zealous A.G., the Commission is likely to continue to take a hard look at mutual funds, and a more aggressive SEC in the years to come is likely to be his legacy, industry insiders tell CBSMarketWatch.

One indication already of this is the SEC and NASD’s joint investigation into gifts by two dozen brokerage firms to fund execs, which they launched independently of the attorney general. The SEC is also looking into revenue-sharing and is going to re-examine the use of 12b-1 fees. Further, the SEC’s newly created office of risk assessment has been set up to detect new ways criminals might corrupt the system.

"We want our efforts and oversight to be more anticipatory and preventative in nature," SEC Chairman William Donaldson recently said. As one industry veteran sees it, this mandate already seems to be working: "I’ve been involved in this industry since 1969, and I’ve never seen a Commission as aggressive," said Geoff Bobroff, president of Bobroff Consulting. "The SEC is examining and re-examining every aspect of the mutual fund industry, and to some extent, reinterpreting old positions."

Roy Weitz, industry critic and publisher of, commented: "The SEC was definitely goosed by Spitzer beating them to the punch. It looks like the SEC wants to identify conflicts and jump on them before anyone else does."

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.

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