August 16, 1994
TO: BOARD OF GOVERNORS NO. 77-94
MEMBERS - ONE PER COMPLEX NO. 57-94
PUBLIC INFORMATION COMMITTEE NO. 28-94
RE: Response to Negative News Coverage
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Negative articles appearing last week in national media such
as the New York Times and Wall Street Journal underscore what we
have long anticipated. Our industry has arrived at the point
where our growth and size is producing often critical news media
scrutiny. This type of coverage illuminates the need to educate
even more the news media about our industry, particularly with
respect to the strong shareholder protections provided by the
regulatory structure, and our industry's support for effective
regulation and increased SEC resources.
In response to this situation, the Institute intends to
enhance our already substantial news media relations efforts by
increasing our meetings with financial editors and writers;
providing more mailings to the media of background papers on
issues of current and possible future concern; and considering
media educational seminars (that could be co-sponsored by
journalism organizations). In addition, we are working closely
with members of the Institute's Public Information Committee and
other members to coordinate positive messages about the fund
industry and speedy responses to negative situations.
Most recently, we have responded directly to the more
blatant situations, such as the front page series in last week's
New York Times, which implied, without supporting evidence, that
there are widespread serious problems in the fund industry.
We expressed our concerns to the Times, stating that the
front page placement, provocative headlines and distorted
graphics created the impression of serious and widespread
problems in the fund industry, whereas the text discussed a few
isolated, mostly previously reported situations which did not
justify the alarmist headlines.
August 16, 1994
Page Two
Maintaining the media's confidence in the integrity of the
investment company industry is an important challenge requiring
the best efforts of the Institute and all of its members. I
would very much appreciate receiving your views on this subject.
Matthew P. Fink
President