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Eliot Spitzer, the New York attorney general, will meet senior officials from the Securities and Exchange Commission on Tuesday in an attempt to coordinate their efforts in probing the mutual fund industry.

On Monday he will speak to the U.S. Senate, where he will call for funds that permitted the practices at the heart of the scandal - “late trading” and “market timing” - to compensate investors.

Any profits made by such practices and any advisory fees received during the time they were permitted should be disgorged by the funds, he will say. Mr. Spitzer will also focus on the need to overhaul mutual fund boards and will call for board chairmen to be independent from fund management companies. The SEC meeting is the first of a new committee designed to prevent territorial battles that have hit previous probes.

In an interview with the Financial Times, Mr. Spitzer said he wanted board chairmen to realize they have a duty to protect shareholders not management. On Sunday, the fallout from the probe spread, as Richard Strong resigned as chairman of Strong Mutual Funds, days after Mr. Spitzer accused him of market timing shares for his own personal gain. Mr. Strong will remain chief executive and chairman of Strong Capital Management. The leadership of Lawrence Lasser, chief executive of Putnam Investments, is also being scrutinized, following civil charges against the Boston firm by Massachusetts regulators and the SEC. state-sponsored pension funds and endowments have pulled billions of dollars out of Putnam, the fifth-biggest US mutual fund company. Jeffrey Greenberg, chief executive of Marsh & McLennan, Putnam’s parent company, will be in Boston on Monday to assess Mr. Lasser’s leadership. The investigations by his office show board members have either confused their role or grown complacent. “This is the same story we have heard whether Enron, WorldCom and Tyco: where was the board?” said Mr. Spitzer.

“The single most critical point has to be to bringing mutual fund boards back to where they should be in terms of who they have a fiduciary duty towards.”

Mr. Spitzer will tell the Senate that mutual fund boards have not been “adequately aggressive” in overseeing fund managers despite their “self-professed claims of purity”. He will also call for funds to introduce tougher rules to stamp out improper trading and point to what he regards as excessive fees. “We’re talking enormous sums,” he said.

Mr. Spitzer says regulators are still at an early stage in their investigations and are not yet in a position to hammer out a settlement with the industry.

“Every time we turn over a rock, there are more vermin crawling beneath it,” he said.

© The Financial Times Ltd 2013. "FT" and "Financial Times" are trademarks of the Financial Times.

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