Mutual Funds' Greed Machine: Some skimming is legal but unethical, and some is flat-out illegal. Fund companies have allowed both, making their rich managers richer yet.

Publication: Newsweek

Publication Date: 24-NOV-03

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Byline: Jane Bryant Quinn

One thing you can count on: when you invest, a lot of the people you trust are going to cheat. Billions of investor dollars whirl through the system. It's all too easy for insiders to stick their hands into that current and grab. We're not talking about a bad apple here and there. Cheating runs through Wall Street's very seams--even in sainted mutual funds.

Every few days, new cases of fraud pop up in the $7 trillion mutual-fund industry. Big names are involved, and funds that seemed pristine. The charges center on something you probably didn't know was possible: skimming profits from your mutual fund that ought to belong to you.

Turns out, dozens of fund groups secretly created two classes of investors--you (on the bottom) and...

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