The scandal has also affected institutional investors, such as pension-fund sponsors, whose fiduciary duties require them to assess whether a particular investment is prudent and in the interest of plan participants and beneficiaries. Both retail and institutional investors have pulled back sharply from some investment management companies where abuses occurred.
Yet, mutual fund investors have shown little, if any, aggregate net reaction, perhaps because investors pulled cash out of funds with problems and reinvested it in other mutual funds. In the three months before September, when the New York Attorney General first publicly described the trading abuses, $ billion on net was invested in long-term mutual funds.