United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 2005-04-20 monographic deposited born digital 52 p. GA 1.13:GAO-05-313 https://www.govinfo.gov/app/details/GAOREPORTS-GAO-05-313 P0b002ee18038dc7f f:d05313 DGPO 2010-08-12 2011-03-24 GAOREPORTS-GAO-05-313 machine generated eng fdlp REPORT GAOREPORTS-GAO-05-313 GAO-05-313 Brokerage industry Financial analysis Law enforcement Mutual funds Regulatory agencies Securities regulation Internal controls General management reviews Lessons learned Noncompliance Risk management Abuse Other Written Product A21978 Recent violations uncovered in the mutual fund industry raised questions about the ethical practices of the industry and the quality of its oversight. A widespread abuse involved mutual fund companies' investment advisers (firms that provide management and other services to funds) entering into undisclosed arrangements with favored customers to permit market timing (frequent trading to profit from short-term pricing discrepancies) in contravention of stated trading limits. These arrangements harmed long-term mutual fund shareholders by increasing transaction costs and lowering fund returns. Questions have also been raised as to why the New York State Attorney General's Office disclosed the trading abuses in September 2003 before the Securities and Exchange Commission (SEC), which is the mutual fund industry's primary regulator. Accordingly, this report (1) identifies the reasons that SEC did not detect the abuses at an earlier stage and the lessons learned in not doing so, and (2) assesses the steps that SEC has taken to strengthen its mutual fund oversight program and improve mutual fund company operations. https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-05-313/html/GAOREPORTS-GAO-05-313.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GAO-05-313/pdf/GAOREPORTS-GAO-05-313.pdf GAO-05-313 https://www.govinfo.gov/app/details/GAOREPORTS-GAO-05-313 Other Written Product GAO-05-313; Mutual Fund Trading Abuses: Lessons Can Be Learned from SEC Not Having Detected Violations at an Earlier Stage; Brokerage industry Financial analysis Law enforcement Mutual funds Regulatory agencies Securities regulation Internal controls General management reviews Lessons learned Noncompliance Risk management Abuse