“The Securities and Exchange Commission has a complaint for the nation’s mutual-fund managers: How come you never call?” writes Deborah Solomon in today’s Wall Street Journal.

“Enforcement officials say not one mutual-fund company has come in voluntarily to discuss problems uncovered in its business or to talk about ways to avoid conflicts of interest. In contrast, several Wall Street brokerage firms have done so.”

” ‘Fixing yesterday’s problems is good, but if you haven’t thought about catching tomorrow’s problem you’re just going to go from blowup to blowup,’ said Linda Thomsen, the SEC’s deputy director of enforcement. Ms. Thomsen said funds should be engaged in systematic reviews to find potential pitfalls in the way they do business. ‘We want them to be thinking: Do they have conflicts with clients that are affecting their decisions.’ “

“She and other SEC officials say they fear the silence suggests the mutual-fund industry isn’t taking its problems seriously or doing enough to avoid a repeat of the scandals that have sullied the industry’s image.”

“Several fund firms said they are scrutinizing their businesses, but that the SEC is being unrealistic. ‘The whole notion of self-reporting only works if the self-reporting is properly rewarded,’ said Steve Fuller, a former SEC enforcement attorney and a partner at Nixon Peabody who is representing some funds under SEC investigation.”

“Mr. Fuller said the SEC isn’t providing incentives to self-report, such as lighter fines. ‘Why would you find the problem, address the problem, then go to the SEC…so they can fine and sanction you?’ he said.”

“Top SEC officials say they tried to make clear to the fund business that companies that confess wrongdoing will be treated more leniently than those whose wrongdoing is uncovered by regulators. Last fall, Stephen Cutler, the SEC’s enforcement director, gave a speech in which he told the securities industry that ‘once you’ve systematically identified the conflicts within your firm, work to address them and inform us of any violative conduct.’ If the SEC finds problems on its own, he said, ‘I assure you that the consequences will be worse.’ “

“After that speech, several brokerage firms came to the enforcement division to discuss issues.”