The president-elect of the mutual fund industry's trade group said Wednesday that the fund business faces "formidable challenges and extraordinary changes" in the wake of a widespread trading scandal. Paul Stevens, a Washington securities lawyer, is slated to become president of the Investment Company Institute on June 1. He cautioned fund executives at the group's annual conference not to underestimate the scandal's long-term impact on business practices and fiduciary duty. "We should not only expect close scrutiny, but understand that our size and importance demands it," Stevens said.

(CBSMarketWatch.com