Washington -- Rep. Michael Oxley, R-Ohio, chairman of the House Financial Services Committee and co-author of the Sarbanes-Oxley Act, has released a report showing that roughly 85 percent of the mutual fund companies implicated in market-timing and late-day-trading scandals had management-affiliated chairmen at the time of the alleged violations.

According to the report, there have been a total of 19 mutual fund families implicated in market-timing and late-day-trading scandals with 24 chairmen serving during the periods of the alleged or admitted violations. Of that number, 16 had non-independent chairmen overseeing at least some, if not all of the implicated funds.

The companies in the study included fund families subject to settlements, charges, or allegations of market-timing and late-day trading. Fourteen were non-bank based, while five were bank-based. All 14 of the non-bank-based fund families implicated in the scandals had management-affiliated chairmen.

“Implicated funds are extremely likely to have management-affiliated chairmen,” Oxley said. “One way to reduce the kind of self-dealing that hurts shareholders is to require independent chairmen.”

Oxley subsequently sent the report to Securities and Exchange Commission Chairman William Donaldson so that the findings be reviewed and urged the regulator to adopt a proposal that requires independent chairmen at mutual fund companies.

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