“I think you should investigate mutual funds,” said a clearly nervous female voice.
The anonymous phone message, left with a staff lawyer for New York Attorney General Eliot L. Spitzer, touched off an intense investigation of the mutual fund industry in the summer of 2003. Spitzer, the ambitious prosecutor who had just nailed Wall Street investment banks for sending out biased stock research to investors, was looking for a new target. The $7 trillion mutual fund industry, which had been largely scandal-free for decades, was ripe for exploration, especially given the fees they charge investors for handling their money.
A very interesting read in the Washington Post on how a tipster set the fund scandal snowballing: Tipster set fund scandal snowballing.