Legendary investor Mr Warren Buffett has criticised mutual funds that cheat their shareholders, and overpaid chief executives in his annual letter to Berkshire Hathaway shareholders.
"I am on my soapbox now only because the blatant wrongdoing that has occurred has betrayed the trust of so many millions of shareholders," Mr Buffett, the world's second-richest man, told shareholders.
"Hundreds of industry insiders had to know what was going on, yet none publicly said a word. It took Eliot Spitzer, and the whistleblowers who aided him, to initiate a housecleaning. We urge fund directors to continue the job."
Mr Eliot Spitzer is the New York district attorney who has begun a series of investigations into alleged malpractice at Wall Street firms. Many mutual funds are accused of using shareholders' money to finance profitable deals they then keep for themselves while allocating less lucrative deals to shareholder portfolios.
Mr Buffett lamented that even many "independent" fund directors, who often receive more than $100,000 a year in fees, were guilty of retaining and overpaying managers who performed poorly or looted shareholders to line their own pockets.
Mr Buffett said the two key tasks for any director were to hire and retain honest people, and to pay them fairly. Yet in paying chief executives, he said, many failed. "In judging whether corporate America is serious about reforming itself, CEO pay remains the acid test," he said. "To date, the results aren't encouraging."
In perhaps the most famous recent example, Mr Richard Grasso was ousted last September as chairman of the New York Stock Exchange amid widespread criticism of his $188 million compensation package.
Mr Buffett has for years taken a $100,000 annual salary to run Berkshire, although with a net worth that Forbesmagazine last month put at $42.9 billion, he can afford it.