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Most in the mutual fund industry will remember 2003 as the year of the scandal.

New York Attorney General Eliot Spitzer, guns blazing and fresh off his monumental settlement with the Wall Street brokerage firms, unleashed a bombshell on Sept. 3 that is still sending shockwaves through the fund industry.

Scores of top-level executives have lost their jobs, and firms have collectively agreed to pay nearly $2 billion in penalties, disgorgement and reduced fees, so far.

The scandal has changed the lives of many touching the fund industry. Theodore Sihpol, III, the former Bank of America broker, has been indicted and could face up to 25 years in prison, if convicted.

Well-known former industry heavy hitters such as Dick Strong, Gary Pilgrim and Harold Baxter are likely to keep a low profile while sorting out their legal woes. Not much has surfaced about their future plans since they were dismissed from their respective firms.

Others such as Larry Lasser, who have been shown the door, but are not likely to see additional sanctions, are probably examining their options and will reemerge within the industry in time in a consulting capacity or in some sort of behind-the-scenes role, executive recruiters say.

However, Eddie Stern, Canary Capital's ringleader, is working. A trio of whistleblowers has experienced the fallout from the scandal and one well-known, well-liked fund industry vet is behind bars. Read on to find out their stories and where they are now.

Eddie Stern

Eddie Stern and his hedge fund, Canary Capital, settled with New York Attorney General Eliot Spitzer's office last September, and as part of his agreement, is required to further help with the investigation into fund abuses.

Forced to pay $40 million to settle, the Canary kingpin is working at his family's business, the Hartz Group. "Eddie is very much involved in the family business," said Stern spokesman Ron Simoncini. "I'm not so sure Eddie has a title, but he's active in managing the family's investments in accordance with his agreement with the Attorney General's office."

The deal with Spitzer allows Stern to manage investments on behalf of his family, but not to handle any third-party money. In fact, he is still allowed to own mutual funds, as long as he holds them for at least a year. "The settlement allows him to start managing others' money in a decade.

"Eddie's not active in the real estate company, but the Hartz Group has extensive investments," Simoncini said. "The company defies general perceptions of family companies work."

Eddie's father, Leonard Stern is the CEO and chairman of Hartz Mountain Group, the family's real estate business, while his brother Emanuel Stern serves as COO and president of the firm.

"This is a very large organization with substantial investments, and Eddie and Emanuel are both managers of different functions in that company," Simoncini said. "Eddie remains active in the family's non-real estate investments. Emanuel is active in the family's real estate investments."

As for a return to managing money for others down the road, Simoncini said, "I don't think he's given it any thought."

James Patrick Connelly, Jr.

James Patrick Connelly, Jr., 41, a former vice chairman at Fred Alger Management is serving a one-to-three year prison sentence for tampering with evidence in connection with the investigations into market timing at his firm. Connelly, who was turned in by other Alger employees, is serving the sentence in Mid-Orange Correctional Facility located in Orange County, N.Y. Mid-Orange is a medium-security facility in the New York State prison system. He is eligible for parole on Feb. 18, 2005 and has his first hearing scheduled for December. A spokeswoman for New York State Correctional Services said Connelly has had no disciplinary incidents as of early May and is in with the general population.

Connelly, the first fund executive to be sentenced to jail time in the scandal, instructed Alger employees to delete e-mails in relation to investigations into timing arrangements between the firm and hedge fund Veras Investment Partners. Connelly also coached employees on how to answer regulator's deposition questions.

Connelly works Monday through Friday in the afternoons and evenings, for a total of about six hours a day. Making 40 cents an hour, Connelly labors in the prison commissary, which is like the prison's facilities store.

It will surely take a long time at that rate to pay off the $400,000 Connelly agreed to pay the Securities and Exchange Commission in October. In addition, Connelly is barred from associating with any broker/dealer, or investment advisor and banned from acting in various capacities in relation to any registered investment company.

Peter Scannell

Peter Scannell, the first whistleblower in the fund industry and the man that helped regulators take down Putnam Investments, hopes to find a new professional home in the not-so-distant future.