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That accounting firms and stockbrokers have been breaching their fiduciary duties is old news.

Here's the latest excuse, as published at, attributed to C. Meyrick Payne of Management Practice Inc.:

We still live in a capitalist system so if managers can make shareholders pay, they will.

This statement was made in regard to charging mutual fund shareholders for membership fees paid to Investment Company Institute (ICI), a lobbying organization that serves the interests of mutual fund managers.

It's important to understand that the interests of fund managers and fund shareholders are not aligned, but fund managers have a fiduciary responsibility to the fund shareholders. In essence, the fund managers have taken money that they were responsible for managing and converted it to their private purposes. In doing so, they have breached their fiduciary responsibility to fund shareholders.

A breach of fiduciary responsibility is, in essence, indistinguishable from embezzlement or simply theft. And how do we handle thieves?

By now what we've learned is that these thefts that have come to light in the last few years are not isolated incidents, but they are pervasive, standard industry practice.

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Revision r1.1 - 11 Jan 2004 - 18:29 by EliMantel web search for EliMantel
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