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Donohue's Primary Task: Repairing Investor Trust

With Andrew "Buddy" Donohue taking the helm as director of the Securities and Exchange Commission's division of investment management last week, industry insiders have begun conjecturing as to what kind of leadership he will provide the mutual fund industry.

While many of his predecessors had distinguished careers at private law firms, elsewhere in the SEC, or with another regulator, Donohue previously served as general counsel for Merrill Lynch Investment Managers, and, prior to that, as general counsel for OppenheimerFunds. Executives believe that real-world experience will enable the new director to view the industry from investors' point of view and help it to restore investor trust.

"He's the first in a while to come to this position with live, real-world experience from the fund industry," Geoff Bobroff, president of Bobroff Consulting, told MarketWatch. "His connections will hopefully mean he comes with knowledge, not that he can be influenced" by his years of working inside the industry.

Certainly, Donohue comes at a time when the division of investment management has a number of unresolved issues to settle, including the independent chairman rule, point-of-sale disclosure, soft-dollar restrictions, 12b-1 fees, the 4 p.m. EST "hard close," redemption fees and disclosure on manager compensation.

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