SEC Proposes New Rules for Fund Directors

The Securities and Exchange Commission on Wednesday proposed a raft of ideas aimed at fixing the scandal-wracked mutual fund industry.

None of the proposals are new ideas, but this is the closest the SEC has come to regulating the behavior and independence of fund directors.

The SEC proposed three rules aimed at lessening the bias of fund directors. Each fund has a board that determines the management of the fund's portfolio, sets fees and is generally responsible for the overall management and administration of the fund. The boards are expected to act in the shareholders' best interest, but they have recently been lambasted for not preventing much of the unethical and illegal behavior that fund companies have been engaging in. ...