Buy, Lie, and Sell High: How Investors Lost Out on Enron and the Internet Bubble

Improving Disclosure and Governance at Mutual Funds

Mutual funds have grown enormously in recent years, and have become a major investment vehicle for small investors. In fact, the retail investor buying individual stocks is a less and less important factor in the market. Instead, small investors put their money in mutual funds, and because of professional management and greater diversification, that's where it ought to go.

But there are both disclosure and governance issues. The boilerplate of mutual funds is virtually useless to investors, and many funds tend to drift away from whatever principles are stated in their prospectuses.

If the profile of a fund's investments is being changed, then that information ought to be disclosed both in an ...