Financial Accounting Blog

Wednesday, November 05, 2003

The New York Times reports that the S.E.C. and Eliot Spitzer (NY-AG) are considering legal action against Alliance Capital Management for suspected improper trading in mutual funds. Alliance, which managed a whopping $438 billion as of the end of September, has said that it is cooperating with regulators.

It is important to have the SEC and a great champion like Eliot Spitzer remind everyone that in the final analysis, illegal activities such as insider trading and accounting fraud cannot replace the fundamentals: strong future earnings and reduced risk perception for sustained growth in the stock market, and hence the mutual funds industry.

Joseph Thodiyil.